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EXHIBIT 2
OPTION AND SECURITIES PURCHASE AGREEMENT
AMONG
TLL PARTNERS, L.L.C.,
CIVC PARTNERS I
AND
CONTINENTAL ILLINOIS VENTURE CORPORATION
DATED AS OF AUGUST 24, 2001
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS..................................................... 1
Section 1.1 Definitions............................................... 1
Section 1.2 Other Terms............................................... 4
ARTICLE II PURCHASE AND SALE OF OPTION..................................... 4
Section 2.1 Purchase and Sale of Option............................... 4
Section 2.2 The Purchase Price........................................ 5
Section 2.3 The Initial Closing....................................... 6
Section 2.4 Delivery.................................................. 6
Section 2.5 Director Resignations..................................... 7
ARTICLE III REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLERS........ 7
Section 3.1 Title..................................................... 7
Section 3.2 Organization and Qualification............................ 7
Section 3.3 Power and Authority....................................... 7
Section 3.4 Enforceability............................................ 7
Section 3.5 No Default or Consents.................................... 7
Section 3.6 Litigation................................................ 8
Section 3.7 Brokers, etc.............................................. 8
Section 3.8 Bankruptcy................................................ 8
Section 3.9 Disposition Decision...................................... 8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER................. 8
Section 4.1 Organization and Qualification............................ 8
Section 4.2 Power and Authority....................................... 8
Section 4.3 Enforceability............................................ 9
Section 4.4 No Default or Consents.................................... 9
Section 4.5 Brokers, etc.............................................. 9
Section 4.6 Investment................................................ 9
Section 4.7 Nature of Purchaser....................................... 9
ARTICLE V CONDITIONS PRECEDENT TO INITIAL CLOSING......................... 9
Section 5.1 Conditions Precedent to Obligations of the Purchaser...... 9
Section 5.2 Conditions Precedent to Obligations of Sellers............ 11
ARTICLE VI COVENANTS....................................................... 11
Section 6.1 Cooperation............................................... 11
Section 6.2 Corporate and Other Actions............................... 12
Section 6.3 No Solicitations.......................................... 12
Section 6.4 Consents.................................................. 12
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Section 6.5 Stock Conversion........................................ 12
ARTICLE VII MISCELLANEOUS.................................................. 13
Section 7.1 Survival of Provisions.................................. 13
Section 7.2 Indemnification/Specific Performance.................... 13
Section 7.3 Termination............................................. 14
Section 7.4 No Waiver; Modifications in Writing..................... 15
Section 7.5 Communications.......................................... 15
Section 7.6 Expenses................................................ 16
Section 7.7 Execution in Counterparts............................... 16
Section 7.8 Binding Effect; Assignment.............................. 16
Section 7.9 Entire Agreement........................................ 16
Section 7.10 Brokers and Agents...................................... 17
Section 7.11 Public Announcements.................................... 17
Section 7.12 Governing Law........................................... 17
Section 7.13 Further Assurances...................................... 17
Section 7.14 Severability of Provisions.............................. 17
Section 7.15 Headings................................................ 17
Section 7.16 Time.................................................... 17
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Exhibits
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Exhibit A -- Wire Transfer Instructions
Exhibit B -- Form of Release
Exhibit C -- Legal Opinion of Sellers' Counsel
Schedules
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Schedule 2.1(a) -- Sellers' Ownership of Teletouch Securities and
Purchase Price Payable to Sellers
Schedule 2.1(b) -- Allocation of Option Payments to Sellers
Schedule 2.2 -- Portion of Purchase Price Payable at Closing
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OPTION AND SECURITIES PURCHASE AGREEMENT
This OPTION AND SECURITIES PURCHASE AGREEMENT dated as of August 24, 2001
(the "Agreement"), is by and among TLL Partners, L.L.C., a Delaware limited
liability company (the "Purchaser"), CIVC Partners I, a Delaware limited
partnership ("Partners") and Continental Illinois Venture Corporation, a
Delaware corporation ("CIVC"). CIVC and Partners are referred
to herein as the "Sellers."
In consideration of the mutual covenants and agreements set forth herein
and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. As used in this Agreement, and unless the context
requires a different meaning:
"Acquisition Proposal" means any proposal for a sale or other business
transaction to which any Seller is a party relating to the direct or indirect
acquisition of any equity interest in the Teletouch Securities other than the
transactions contemplated by this Agreement.
"Action" means any lawsuit, action, proceeding, investigation or complaint
before any Governmental Authority, mediator or arbitrator.
"Adoption Agreement" has the meaning set forth in Section 2.1(a).
"Affiliate" means, when used with respect to any specified Person, any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person, and as to any Person who
is an individual, that Person's relatives who are a spouse, parent, child,
grandparent or sibling. For the purposes of this definition, "control", when
used with respect to any Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agreement" means this Agreement, as the same may be amended, supplemented
or modified from time to time in accordance with the terms hereof.
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"Assignment of Interest" means an instrument to be executed and delivered
at Closing by each of the Sellers assigning and transferring their interests in
the Teletouch Securities and in such form as is usual and customary for the type
of transactions contemplated by this Agreement.
"Business Day" means a day that is not a Saturday or Sunday, or any other
day on which banking institutions in Chicago, Illinois are obligated by law,
regulation or executive order to open.
"CIVC" has the meaning set forth in the introductory paragraph to this
Agreement.
"Closing" has the meaning set forth in Section 2.3.
"Commission" means the United States Securities and Exchange Commission.
"Consequential Damages" has the meaning set forth in Section 7.2(c).
"Constituent Documents" has the meaning set forth in Section 7.9.
"Corporation" means any corporation, limited liability company, limited or
general partnership, joint venture, association, joint-stock company, business
trust, trust or unincorporated organization.
"Credit Agreement" means the Amended and Restated Credit Agreement by
and between Teletouch Communications, Inc. and Chase Manhattan Bank, N.A.
dated as of January 26, 1998, as amended from time to time through the date
of this Agreement.
"First Option Payment" has the meaning set forth in Section 2.1(b).
"Governmental Authority" means any federal, native American Indian, state,
province, county, city, municipal or other political subdivision or government,
department, commission, board, bureau, court, agency or any other
instrumentality of any of them.
"Lender Consents" means the required consents to the transactions
contemplated by this Agreement of the lending institutions that are parties to
the Credit Agreement.
"Option" has the meaning set forth in Section 2.1(a)
"Option Expiration Date" has the meaning set forth in Section 2.1(a).
"Option Period" has the meaning set forth in Section 2.1(a).
"Other Sellers" shall mean, collectively, Xxxxxxx X. Xxxxxxx, Xxxxx X.
Xxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxxxx X. Xxxxxxxxx, Xxxx X. Xxxxxxx and the
Xxxxxxxx X. Xxxxxxx Trust, and individually, any of the foregoing.
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"Partners" has the meaning set forth in the introductory paragraph to this
Agreement.
"Person" means any individual, Corporation or Governmental Authority.
"Purchase Price" has the meaning set forth in Section 2.1(a).
"Purchaser" has the meaning set forth in the introductory paragraph to
this Agreement.
"Second Option Payment" has the meaning set forth in Section 2.1(b).
"Second Option Payment Date" has the meaning set forth in Section 2.1(b).
"Securities Act" means the Securities Act of 1933, as amended from time to
time, and the rules and regulations of the Commission promulgated thereunder.
"Sellers" has the meaning set forth in the introductory paragraph to this
Agreement and, except as used in Section 2.1(b) and 2.2 or as the context of
this Agreement otherwise requires, shall include each of the Other Sellers upon
each such Other Seller's execution of an Adoption Agreement.
"State" means each of the states of the United States, the District of
Columbia and the Commonwealth of Puerto Rico.
"Stock Powers" shall mean the instruments evidencing the assignment and
transfer of any portion of the Teletouch Securities in such form as is usual and
customary for the transfer of securities.
"Stockholders Agreement" has the meaning set forth in Section 5.1(j).
"Taxes" means all taxes, charges, fees, levies and all other governmental
fees and charges of any nature whatsoever and however denominated, imposed by
any Governmental Authority, including all interest, additions and penalties with
respect thereto.
"Teletouch" means Teletouch Communications, Inc., a Delaware
corporation.
"Teletouch Common Stock" shall mean the common stock, $0.001 par value per
share, of Teletouch.
"Teletouch Common Stock Warrants" shall mean all outstanding warrants to
purchase Teletouch Common Stock.
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"Teletouch Notes" shall mean each of the 14.4% Junior Subordinated Notes
dated August 3, 1995, issued by Teletouch and payable, respectively, in the
original principal amounts to CIVC, Partners and the Other Sellers as indicated
on Schedule 2.1(a).
"Teletouch Securities" shall mean (a) that number of shares of Teletouch
Common Stock, Teletouch Series A Preferred Stock and Teletouch Series B
Preferred Stock, and those Teletouch Common Stock Warrants and Teletouch Series
B Preferred Stock Warrants held, in each case, by one or more of the Sellers and
the Other Sellers and (b) that portion of the Teletouch Note held by one or more
of the Sellers and the Other Sellers, in the case of both (a) and (b), all as
set forth on Schedule 2.1(a) hereto.
"Teletouch Series A Preferred Stock" shall mean the Series A 14%
Cumulative Preferred Stock, $0.001 par value per share, of Teletouch.
"Teletouch Series B Preferred Stock" shall mean the Series B Preferred
Stock, $0.001 par value per share, of Teletouch.
"Teletouch Series B Preferred Stock Warrants" shall mean all outstanding
warrants to purchase Teletouch Series B Preferred Stock.
"Termination Date" has the meaning set forth in Section 7.1.
"Warrant Holders" shall mean Xxxxxx X. Xxxxxx, Xxxxxx X. Xxx Xxxx, Xx.
and Xxxxxxxxxxx X. Xxxxx as holders of Teletouch Common Stock Warrants.
SECTION 1.2 OTHER TERMS. Whenever the context requires, the words used
herein shall include the masculine, feminine and the neuter gender, and the
singular and plural. All references to sections and articles shall be to
sections or articles of this Agreement, except as otherwise specified.
ARTICLE II
PURCHASE AND SALE OF OPTION
SECTION 2.1 GRANT AND PURCHASE OF OPTION.
(a) Subject to the terms and conditions hereof, each Seller,
respectively, grants to Purchaser an option, and agrees to use its
reasonable efforts to have each of the Other Sellers grant to Purchaser an
option, to purchase for the consideration payable to each Seller as set
forth on Schedule 2.1(a) and for an aggregate consideration of $800,000
payable to Sellers and all Other Sellers ("Purchase Price") the Teletouch
Securities as applicable and as set forth on Schedule 2.1(a) hereto beside
each such Seller's and Other Seller's name (collectively, the "Options"
and as to each Seller, the "Option"). Unless terminated earlier pursuant
to paragraph (b) below of this Section 2.1, the Options shall expire at
6:00 p.m. Central Standard Time on May 24, 2002 (such period from the date
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hereof until such date referred to herein as the "Option Period" and such
expiration date and time referred to herein as the "Option Expiration
Date") and may be exercised at any time prior to the Option Expiration
Date unless earlier terminated pursuant to the terms of this Agreement.
The Option Expiration Date shall be extended to the day immediately
following the Closing Date if the Closing Date (as determined pursuant to
Section 2.3 below) is to occur on a date after the initially designated
Option Expiration Date. Subsequent to the date hereof, Other Sellers shall
evidence their grant of an Option with respect to Teletouch Securities
held by them by executing and delivering to Purchaser an adoption
agreement in such form as is reasonably satisfactory to Purchaser whereby
such Other Seller (i) agrees to sell its Teletouch Securities to Purchaser
in consideration for the portion of the Purchase Price payable to such
Other Seller as provided in this Agreement, (ii) makes essentially the
same representations and warranties of the Sellers as set forth in Article
III hereof and (iii) otherwise agrees to be bound by the terms and
conditions of this Agreement as though it were an original party hereto
("Adoption Agreement").
(b) In consideration for the grant of the Option in Section 2.1(a)
above, Purchaser agrees to pay to Sellers $100,000 in the aggregate. No
cash consideration shall be paid for the grant of an Option by any of the
Other Sellers. Upon execution of this Agreement, Purchaser shall pay
Sellers the aggregate sum of $50,000, allocated to each of the Sellers in
the amounts set forth on Schedule 2.1(b) hereto ("First Option Payment").
Not later than the first Business Day following the date that is ninety
(90) days after the date hereof ("Second Option Payment Date"), Purchaser
shall pay Sellers an additional $50,000, allocated to each of Sellers in
the amounts set forth on Schedule 2.1(b) hereto ("Second Option Payment").
Payment of the First Option Payment and the Second Option Payment shall be
made by wire transfer in same-day funds to the accounts of the Sellers as
set forth on Exhibit A hereto. If the Second Option Payment is not made as
of the Second Option Payment Date, the Options granted hereby shall
automatically terminate. If the Options terminate pursuant to the
preceding sentence, then (i) none of the parties hereto shall have any
further rights or obligations under this Agreement as of the date of such
termination of the Options, and (ii) Sellers shall be entitled to retain
the First Option Payment.
SECTION 2.2 THE PURCHASE PRICE. Purchaser shall be entitled to exercise
the Options on the Closing Date. Subject to the terms and conditions
hereof, Purchaser shall exercise the Options by paying (by wire transfer
of same-day funds) the Purchase Price to the Sellers and to those Other
Sellers who have executed Adoption Agreements, allocated to each Seller
and such Other Sellers in the amounts set forth beside the name of such
Seller on Schedule 2.2 hereto. The amount of the First Option Payment and
the amount of the Second Option Payment (if the Second Option Payment is
made prior to the Closing Date) shall be credited to the portion of the
Purchase Price payable to Sellers and the amount of the wire transfers
reduced accordingly. To the extent that all Teletouch Securities held by a
Person who is one of the Other Sellers are not tendered by such Other
Seller for sale to Purchaser hereunder pursuant to an Adoption Agreement,
that portion of the Purchase Price payable to CIVC shall be reduced by an
amount determined
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to be the difference between (a) the amount as of the Closing Date of the
outstanding balance of all unpaid principal and accrued interest owed
under the Teletouch Note held by such Other Seller and (b) the amount of
the Purchase Price that otherwise would have been paid to such Other
Seller as set forth in Schedule 2.2.
SECTION 2.3 THE CLOSING. Purchaser's exercise of the Options will occur at
the Closing ("Closing") to be held at the offices of Bracewell &
Xxxxxxxxx, L.L.P., 000 Xxxxxxxxx Xx., Xxxxx 0000, Xxxxxxx, Xxxxx at 9:00
A.M. Central Standard Time, on the tenth Business Day after the date on
which Purchaser has given notice ("Exercise Notice") to Sellers of its
exercise of the Options, or at such other time and place as the Purchaser
and Sellers may agree. Unless this Agreement is otherwise terminated,
Purchaser shall give the Exercise Notice at any time after the date hereof
and prior to the Option Expiration Date. The date and time at which the
Closing is to be concluded is the "Closing Date."
SECTION 2.4 DELIVERIES AT CLOSING.
Section 2.4.1 Deliveries by Purchaser. At the Closing, Purchaser
shall make the following deliveries to Sellers:
(a) Purchaser shall deliver that portion of the Purchase
Price payable to Sellers (reduced by the First Option
Payment and by the Second Option Payment if such was
paid to the Sellers) by wire transfer of funds to
accounts set forth in Exhibit A or as otherwise
designated by Sellers to Purchaser in writing at least
three (3) Business Days prior to the Closing Date;
(b) Purchaser shall execute and deliver to Sellers the
Release in the form attached as Exhibit B hereto; and
(c) Purchaser shall make each of the other deliveries
required by Section 5.2 below.
Section 2.4.2 Deliveries by Seller. At the Closing, Sellers shall
make the following deliveries to Purchaser:
(a) Each Seller shall execute and deliver an Assignment of
Interest and Stock Power to Purchaser in usual and
customary form for the transfers contemplated by this
Agreement together with the delivery of the Teletouch
Securities held by such Seller;
(b) Each Seller shall execute and deliver the Release; and
(c) Sellers shall make each of the other deliveries required
by Section 5.1 below.
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SECTION 2.5 DIRECTOR RESIGNATIONS. Within seven (7) days of the date
hereof, CIVC shall cause each person who is a CIVC or Partners designee to
the Board of Directors of Teletouch to resign as a director of Teletouch
and shall not designate a replacement thereof (or cause or allow any such
replacement to be designated) unless such designee has been approved in
writing by Purchaser.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLERS
Each Seller, severally and not jointly, represents and warrants to the
Purchaser as follows:
SECTION 3.1 TITLE. Seller has good and valid title to the Teletouch
Securities held by it, and owns such Teletouch Securities free and clear from
all liens, security interests, options, charges, claims, mortgages, deeds of
trusts, or other encumbrances of any kind provided, however, that the Teletouch
Securities of Partners are subject to a purchase money security interest that
shall be released at Closing. The Teletouch Securities constitute all of the
interests, rights or ownership of the Seller in any equity or debt securities or
debt instruments of Teletouch.
SECTION 3.2 ORGANIZATION AND QUALIFICATION. Seller is duly formed, validly
existing and in good standing under the laws of the state of its incorporation
or formation, as applicable, and has all requisite power and authority carry on
its business as such business is currently being conducted.
SECTION 3.3 POWER AND AUTHORITY. Seller has all requisite power and
authority to enter into this Agreement and all other agreements, conveyances,
documents, instruments and certificates to be delivered by Seller pursuant to
this Agreement and to perform the obligations hereunder and thereunder, and the
execution, delivery and performance of this Agreement and such documents by
Seller have been duly and validly authorized by all necessary action.
SECTION 3.4 ENFORCEABILITY. This Agreement has been duly and validly
executed and delivered by Seller and constitutes the legal, valid and binding
obligation of Seller enforceable against Seller in accordance with its terms,
except as enforcement may be limited by laws affecting the rights of creditors
generally and legal and equitable limitations on the availability of specific
remedies.
SECTION 3.5 NO DEFAULT OR CONSENTS. Neither the execution and delivery of
this Agreement or any document or instrument executed and delivered in
connection therewith, nor the consummation of the transactions contemplated
herein will (a) conflict with or result in a breach, default or violation of or
require consent under (i) the organizational documents of Seller, or (ii) any
material contract, lease, instrument or mortgage to which such Seller is a party
or by which Seller is bound; or (b) result in the creation of any lien or
security interest upon the
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Teletouch Securities, including but not limited to, a right to purchase the
Teletouch Securities. The failure of any person not a party hereto to authorize
or approve this Agreement will not give any person the right to enjoin, rescind
or otherwise prevent or impede the sale of the Teletouch Securities to Purchaser
in accordance with the terms of this Agreement or to obtain damages from, or any
other judicial relief against, Purchaser as a result of the transactions carried
out by Seller in accordance with the provisions of this Agreement.
SECTION 3.6 LITIGATION. There is not pending or, to the knowledge of
Seller, threatened, any suit, action, arbitration, demand, investigation or
legal, administrative or other governmental proceeding against or affecting
Seller in connection with Seller's execution and delivery of this Agreement or
the consummation of the transactions contemplated herein.
SECTION 3.7 BROKERS, ETC. No broker or investment banker acting on behalf
of Seller or under the authority of Seller is or will be entitled to any
broker's or finder's fee or any other commission or similar fee directly or
indirectly from Seller in connection with any of the transactions contemplated
herein.
SECTION 3.8 BANKRUPTCY. There are no bankruptcy, reorganization or
arrangement proceedings pending against, being contemplated by, or to Seller's
knowledge, threatened against Seller.
SECTION 3.9 DISPOSITION DECISION. Seller (a) is an "accredited investor"
within the meaning of Rule 501 under the Securities Act, (b) by reason of its
business and financial experience (or that of its owner) has such knowledge,
sophistication and experience in business and financial matters so as to be
capable of evaluating a decision to sell the Teletouch Securities held by it and
(c) has had available to it such information regarding Teletouch and the
Teletouch Securities as it deems appropriate and necessary in order to enter
into this Agreement for the sale and transfer of such Teletouch Securities.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser represents and warrants to the Sellers as follows:
SECTION 4.1 ORGANIZATION AND QUALIFICATION. Purchaser is a limited
liability company, duly formed, validly existing and in good standing under the
laws of the State of Delaware.
SECTION 4.2 POWER AND AUTHORITY. Purchaser has all requisite power and
authority to enter into this Agreement and all other agreements, conveyances,
documents, instruments and certificates to be delivered by it pursuant to this
Agreement and to perform its obligations hereunder and thereunder, and the
execution, delivery and performance of this Agreement and such documents by it
have been duly and validly authorized by all necessary action.
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SECTION 4.3 ENFORCEABILITY. This Agreement has been duly and validly
executed and delivered by Purchaser, constitutes the legal, valid and binding
obligation of Purchaser enforceable against Purchaser in accordance with its
terms, except as enforcement may be limited by applicable laws affecting the
rights of creditors generally and legal and equitable limitations on the
availability of specific remedies.
SECTION 4.4 NO DEFAULT OR CONSENTS. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated herein will
conflict with or result in a breach, default or violation of or require consent
under (a) the organizational documents of Purchaser, or (b) any material
contract or agreement to which Purchaser is a party or by which it is bound.
SECTION 4.5 BROKERS, ETC. No broker or investment banker acting on behalf
of Purchaser or under the authority of Purchaser is or will be entitled to any
broker's or finder's fee or any other commission or similar fee directly or
indirectly from Purchaser in connection with any of the transactions
contemplated herein.
SECTION 4.6 INVESTMENT. The Purchaser understands that the Teletouch
Securities have not been registered under the Securities Act and, therefore,
cannot be resold unless they are registered under the Securities Act or unless
an exemption from such registration is available. Purchaser represents and
warrants to Sellers that the Teletouch Securities are being acquired for
investment purposes, for its own account and with no intention of distributing
or reselling the Teletouch Securities in violation of federal or State
securities laws. If Purchaser should in the future decide to dispose of any of
the Teletouch Securities, Purchaser understands and agrees that it may do so
only in compliance with the Securities Act and applicable State securities laws,
as then in effect.
SECTION 4.7 NATURE OF PURCHASER. The Purchaser represents and warrants to
the Sellers that (a) it is an "accredited investor" within the meaning of Rule
501 under the Securities Act and (b) by reason of its business and financial
experience (or that of its owners) it has such knowledge, sophistication and
experience in business and financial matters, so as to be capable of evaluating
the merits and risks of the prospective investment in the Teletouch Securities,
and is able to bear the economic risk of such investment.
ARTICLE V
CONDITIONS PRECEDENT TO CLOSING
SECTION 5.1 CONDITIONS PRECEDENT TO OBLIGATIONS OF THE PURCHASER. The
obligation of Purchaser to purchase the Teletouch Securities at Closing is
subject to the satisfaction or waiver of the following conditions on the Closing
Date:
(a) each Seller shall have furnished Purchaser with a certified copy
of resolutions adopted by the Board of Directors, general partner or other
governing entity
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of such Seller approving the execution, delivery and performance of this
Agreement and the transactions and other documents and instruments
contemplated thereby;
(b) the representations and warranties made by Sellers herein shall
be true and correct in all material respects at the time they were made
and as of the Closing Date with the same effect as though such
representations and warranties had been made at and as of the Closing
Date; Sellers shall have performed and complied in all material respects
with all agreements and conditions required by this Agreement to be
performed or complied with by then at or prior to the Closing Date, and
Purchaser shall have received a certificate from each Seller certifying as
to the foregoing executed by a duly authorized representative of such
Seller and dated as of the Closing Date;
(c) the purchase of and payment for the Teletouch Securities (i)
shall not be prohibited or enjoined (temporarily or permanently) by any
Governmental Authority pursuant to any applicable law or governmental
regulation nor shall any Action seeking such prohibition or injunction be
pending and (ii) shall not subject Purchaser to any material penalty or,
in its reasonable judgment, other onerous conditions under or pursuant to
any applicable law or governmental regulation;
(d) Purchaser shall have received from counsel to CIVC and Partners
a legal opinion dated the Closing Date, addressing the matters set forth
Exhibit C;
(e) All Teletouch Common Stock Warrants held by the Warrant Holders
shall have been cancelled at no cost or expense to either Teletouch or
Purchaser in consideration for the release referenced in Section 5.2(e)
below and with the written agreement of the Warrant Holders, and evidence
of such cancellation satisfactory to Purchaser shall be delivered to
Purchaser by Sellers at the Closing;
(f) All certificates and instruments representing the Teletouch
Securities shall have been duly transferred to Purchaser and delivered by
Sellers in accordance with the terms of the Assignment of Interest and/or
Stock Powers pursuant to Section 2.4.2 above;
(g) Sellers shall have executed and delivered applicable Assignments
of Interest and/or Stock Powers;
(h) Sellers shall have executed and delivered a release in favor of
Purchaser, Teletouch and the directors and officers of Teletouch in the
form attached as Exhibit B hereto;
(i) the Sellers shall have received all necessary Lender Consents;
and
(j) the Stockholders Agreement dated August 3, 1995, to which
Partners, CIVC, Xxxxxx X. XxXxxxxx, Teletouch and GM Holdings, LLC are
parties, among others (the "Stockholders Agreement"), shall have been
terminated.
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SECTION 5.2 CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLERS. The
obligations of Sellers to sell and transfer the Teletouch Securities hereunder
is subject to the satisfaction or waiver of the following conditions on the
Closing Date:
(a) Purchaser shall have furnished Sellers with a certified copy of
resolutions duly adopted by the members of the Purchaser, approving the
execution, delivery and performance of this Agreement and the transactions
and other documents and instruments contemplated thereby;
(b) the representations and warranties made by Purchaser herein
shall be true and correct in all material respects at the time they were
made and as of the Closing Date with the same effect as though such
representations and warranties had been made at and as of the Closing
Date; Purchaser shall have performed and complied in all material respects
with all agreements and conditions required by this Agreement to be
performed or complied with by it at or prior to the Closing Date, and
Sellers shall have received a certificate certifying as to the foregoing
executed by a duly authorized representative of the Purchaser and dated as
of the Closing Date;
(c) the sale of the Teletouch Securities (i) shall not be prohibited
or enjoined (temporarily or permanently) by any Governmental Authority
pursuant to any applicable law or governmental regulation, nor shall any
Action seeking such prohibition or injunction be pending and (ii) shall
not subject any Seller to any material penalty or, in its reasonable
judgment, other onerous condition under or pursuant to any applicable law
or governmental regulation;
(d) Purchaser shall have paid to each Seller the portion of the
Purchase Price payable to such Seller; and
(e) Purchaser and Teletouch shall have delivered a release in favor
of Sellers and the directors and officers of Sellers, if any, in the form
attached as Exhibit B hereto.
ARTICLE VI
COVENANTS
SECTION 6.1 COOPERATION. Subject to the terms and conditions of this
Agreement and applicable law, the parties shall consult and cooperate with each
other in (a) obtaining all consents, approvals, waivers, permits, authorizations
and approvals of Governmental Authorities and other Persons and (b) providing
all such information concerning such party and its Affiliates as may be
necessary or reasonably requested in connection with any of the foregoing, all
as may be necessary for the consummation as promptly as practicable of the
transactions contemplated hereby. Notwithstanding anything herein which may be
construed to the contrary, Purchaser agrees to cooperate with and permit
Partners to take reasonable actions necessary, at no expense to Purchaser or
Teletouch, to structure the sale of Teletouch Securities by Partners in a manner
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designed to provide Partners with the most favorable tax treatment and enable
Partners to use the sale of Teletouch Securities in the most tax efficient
manner (including without limitation the transfer to CIVC of such Teletouch
Securities prior to the Closing Date); provided, however, that (i) Purchaser
does not agree to take any actions that would adversely affect Purchaser or
Teletouch in any way, financial or otherwise; (ii) Purchaser does not agree to
take any actions that are violative of any law or any agreement, instrument or
other document to which Purchaser and/or Teletouch is a party; (iii) any
transfer by Sellers of Teletouch Securities shall be null and void unless each
Person to whom Teletouch Securities are transferred signs an adoption agreement
upon such transfer whereby such Person adopts and accepts all duties,
liabilities and obligations of Sellers under this Agreement, including the
obligation to execute and deliver the Release referred to in Section 5.1(h) of
this Agreement and the obligation to terminate the Stockholders Agreement as
provided in Section 5.1(j) of this Agreement, with the same force and effect as
if such Person were originally a party hereto and named as a Seller herein; and
(iv) in the event that Sellers transfer any or all Teletouch Securities, Sellers
agree to execute and deliver the Release referred to in Section 5.1(h) of this
Agreement.
SECTION 6.2 CORPORATE AND OTHER ACTIONS. Prior to the Closing Date,
Sellers shall use all commercially reasonable efforts to fulfill their
obligations under this Agreement.
SECTION 6.3 NO SOLICITATIONS. Sellers will not take, nor will they permit
any Affiliate of any Seller (or authorize or permit any investment banker,
financial advisor, attorney, accountant or other Person retained by or acting
for or on behalf of any Seller or any such Affiliate) to take, directly or
indirectly, any action to (i) solicit, encourage, negotiate, assist or otherwise
facilitate any offer or inquiry from any Person concerning an Acquisition
Proposal ("Competing Transaction") or (ii) enter into any agreement, arrangement
or understanding (a) which binds such Seller to a Competing Transaction or (b)
requires any Seller to abandon, terminate or fail to consummate the transactions
contemplated by this Agreement.
SECTION 6.4 CONSENTS. Prior to the Closing, as reasonably requested by
Purchaser, Sellers shall use commercially reasonable efforts to cooperate with
and assist Purchaser in Purchaser's efforts to secure all necessary consents,
approvals, exemptions and waivers from third parties (including Governmental
Authorities) and to give all required notices to enable Sellers to sell the
Teletouch Securities to Purchaser, consummate the Closing or to prevent the sale
of Teletouch Securities from causing a breach of, or default under, or a
termination of, any contract, lease license or other agreement.
SECTION 6.5.STOCK CONVERSION. Prior to the Option Expiration Date, Sellers
shall not convert or exchange any of the Teletouch Securities or exercise any
warrants or rights of conversion with respect to the Teletouch Securities and
will not consent to or allow such conversion or exercise by any of their
Affiliates.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.1 SURVIVAL OF PROVISIONS. The representations and warranties of
the parties set forth in this Agreement shall survive for six months after the
Closing Date, and the right of a party to initiate any action for breach of this
Agreement shall terminate on the date that is six months following the Closing
Date (the "Termination Date"). If a party has notified the other party in
writing of any bona fide claim based upon any breach prior to the Termination
Date (which notice shall describe in reasonable detail the basis of such claim),
the rights of such party under Section 7.2 shall be deemed to survive the
Termination Date for such purposes until such claim has been finally resolved.
SECTION 7.2 INDEMNIFICATION/SPECIFIC PERFORMANCE.
(a) After the Closing, each Seller shall indemnify and hold
Purchaser harmless from and against any damages, losses, costs, expenses,
expenditures, claims and liabilities, including reasonable counsel fees
and reasonable expenses of investigation, defending and prosecuting
litigation or arbitration (collectively, the "Damages"), suffered by
Purchaser as a result of, caused by, or arising out of, the breach of any
covenant, representation or warranty of such Seller in this Agreement,
provided that in no event will a Seller be liable to Purchaser in an
amount exceeding the portion of the Purchase Price payable to such Seller
(or Other Seller) reduced by the amount of the First Option Payment paid
to such Seller.
(b) Purchaser shall indemnify and hold Sellers harmless from and
against any and all Damages suffered by any Seller (and the Other Sellers
who execute an Adoption Agreement) as a result of, caused by, or arising
out of, the breach of any covenant, representation or warranty of
Purchaser in this Agreement, provided that in no event will the Purchaser
be liable to any Seller in an amount exceeding the portion of the Purchase
Price paid to such Seller reduced (with respect to CIVC and Partners) by
the amount of the First Option Payment and, if made, by the amount of the
Second Option Payment. Sellers' sole remedy for failure of the Purchaser
to make the Second Option Payment as of the Second Option Payment Date
shall be the automatic termination of this Agreement and Sellers' right to
retain the First Option Payment.
(c) Without affecting the rights of a party to recovery of actual,
direct Damages, under no circumstances shall any party be liable for
consequential, incidental, indirect, punitive, exemplary or special
damages (collectively, "Consequential Damages") resulting from any cause
whatsoever, whether arising in contract, warranty, tort (including
negligence), strict liability, indemnity or otherwise. It is expressly
agreed that no failure by a party to fulfill any condition hereof shall
constitute a failure of essential purpose entitling the other party to
Consequential Damages.
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(d) Notwithstanding any other provision hereof to the contrary, no
indemnifying party shall be liable for any breach of any representation,
warranty or covenant herein unless the Damages for each breach exceeds
$5,000 individually and the Damages for all breaches exceeds $25,000 and
provided that as an indemnifying party (i) the Purchaser shall be liable
only for the amount by which all such Damages exceed $25,000 and (ii) the
Sellers shall be liable only for the amount by which all such Damages
exceed $50,000.
(e) Sellers acknowledge that (i) the Teletouch Securities are unique
and specifically identifiable and possess value peculiar to themselves
because, inter alia, they represent an amount of securities that could
transfer control of Teletouch to the Purchaser and (ii) the Teletouch
Securities (other than the Teletouch Common Stock) are not readily
available in the open market. Sellers also acknowledge that they have been
advised by Purchaser that Purchaser is negotiating to acquire the senior
indebtedness of Teletouch and that exercise of the Options is directly
related to and dependent upon such acquisition of indebtedness.
Accordingly, Sellers agree that in the event that the Purchaser acquires
such senior indebtedness and the Closing does not occur thereafter solely
because of the failure of Sellers to perform their obligations hereunder
(i) monetary damages and any other remedy at law will not be adequate to
compensate Purchaser for such breach or failure to close because, inter
alia, the assessment of monetary damages is impractical and too
speculative, (ii) Purchaser shall be entitled to specific performance as
the remedy for such breach without the necessity of proving inadequacy of
legal remedies or irreparable harm, or posting bond, (iii) Sellers waive
any objection to the remedy of specific performance, (iv) Sellers agree
that the granting of specific performance by any court will not be deemed
to be harsh or oppressive to any Seller who is ordered specifically to
perform its obligations under this Agreement, and (v) in connection with
any action for specific performance, Purchaser shall be entitled to
reasonable attorneys' fees and other costs of prosecuting such action. The
right to seek specific performance hereunder shall not preclude the
Purchaser from seeking indemnification for breaches of representations and
warranties that it may be entitled to following the Closing under Section
7.2(a) of this Agreement. In the event that the Purchaser acquires the
senior indebtedness of Teletouch and the Closing does not occur thereafter
solely because of the failure of Sellers to perform their obligations
hereunder, if the remedy of specific performance is unavailable to
Purchaser, the provisions of Section 7.2(a) above shall apply even though
the Closing has not occurred.
SECTION 7.3 TERMINATION. This Agreement may be terminated:
(a) by the Purchaser by written notice to CIVC if any of the
conditions specified in Section 5.1 of this Agreement have not been met or
waived pursuant to the terms of this Agreement on or prior to the earlier
to occur of (i) the Closing Date or (ii) the Option Expiration Date;
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(b) by the unanimous written agreement of the Sellers if any of the
conditions specified in Section 5.2 of this Agreement have not been met or
waived by them pursuant to the terms of this Agreement on or prior to the
earlier to occur of (i) the Closing Date or (ii) the Option Expiration
Date; or
(c) upon the failure of Purchaser to make the Second Option Payment
on or prior to the Second Option Payment Date.
SECTION 7.4 NO WAIVER; MODIFICATIONS IN WRITING. No failure or delay on
the part of a Seller or the Purchaser in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies provided for herein are exclusive of any remedies that may be available
to the Seller or the Purchaser at law or in equity or otherwise. Except as
otherwise provided herein, no amendment, waiver, consent, modification or
termination of any provision of this Agreement shall be effective unless signed
by the Sellers and the Purchaser. Any amendment, supplement or modification of
or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by the from the terms of any
provision of this Agreement, shall be effective only in the specific instance
and for the specific purpose for which made or given.
SECTION 7.5 NOTICES. All notices and demands provided for hereunder shall
be in writing, and shall be given by telecopy (confirmed by overnight courier),
air courier guaranteeing overnight delivery or personal delivery. Notice shall
be sent to the following addresses:
If to the Purchaser:
TLL Partners, L.L.C.
000 Xxxxx Xxxxxxx, Xxxxx 0000
Xxxxx, Xxxxx 00000
Attention: Xxxxxx X. XxXxxxxx
Telecopier: 000-000-0000
With a copy to:
Xxxxxx X. Xxxxxxx III
Bracewell & Xxxxxxxxx, L.L.P.
South Tower Pennzoil Place
000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telecopier: 000-000-0000
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and, if to the Sellers:
Continental Illinois Venture Corporation
000 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopier: 000-000-0000
or to such other address as the Sellers or the Purchaser may designate in
writing. All such notices and communications and all notices and communications
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; when receipt acknowledged, if telecopied; and on the next
Business Day if timely delivered to an air courier guaranteeing overnight
delivery.
SECTION 7.6 EXPENSES. Each of the parties shall be responsible for and pay
its own expenses incurred or imposed by law in connection with the transactions
contemplated by this Agreement, except that up to $25,000 of the legal fees and
expenses incurred in the aggregate by the Sellers and/or the Warrant Holders
directly in connection with the transactions contemplated by this Agreement
shall be paid by Purchaser to CIVC (as agent for Sellers for this purpose only)
within a reasonable time (not to exceed 45 days) after receipt by Purchaser from
CIVC of an invoice of Sellers' counsel. The amount of all such fees paid by
Purchaser shall be refunded to Purchaser promptly by CIVC (as agent for Sellers)
in the event that this Agreement is terminated pursuant to Section 7.3(a) above.
SECTION 7.7 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original and all of which counterparts, taken together, shall
constitute but one and the same Agreement.
SECTION 7.8 BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding
upon the Sellers and the Purchaser, and their respective successors and
permitted assigns. Except as expressly provided in this Agreement, this
Agreement shall not be construed so as to confer any right or benefit upon any
Person other than the parties to this Agreement, and their respective successors
and permitted assigns. Neither party may assign any or all of its rights,
privileges and obligations hereunder without the prior written consent of the
other party.
SECTION 7.9 ENTIRE AGREEMENT. This Agreement (including the schedules and
exhibits hereto) and the documents delivered pursuant to this Agreement (the
"Constituent Documents") constitute the entire agreement and understanding
between the Seller and the Purchaser related to the subject matter hereof and
supersede any prior agreement, document or understanding related to the subject
matter hereof. Each party to this Agreement agrees that (a) the other party to
this Agreement (including its agents and representatives) has made no
representation, warranty, covenant or agreement to or with such party relating
to the transactions contemplated hereby, other than those expressly set forth in
the Constituent Documents and (b) such party has not
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relied upon any representation, warranty, covenant or agreement relating to the
transactions contemplated hereby, other than those expressly set forth in the
Constituent Documents.
SECTION 7.10 BROKERS AND AGENTS. Each party to this Agreement agrees to
indemnify the other party hereto against all Damages arising out of claims for
fees or commissions or brokers employed or alleged to have been employed by such
indemnifying party.
SECTION 7.11 PUBLIC ANNOUNCEMENTS. The parties to this Agreement shall
consult with each other regarding any public announcement or statement with
respect to this Agreement or the transactions contemplated hereby and no party
shall issue any public announcement or other statement with respect to the
existence of this Agreement or the transactions contemplated hereby without the
prior consent, which shall not be withheld unreasonably, of the other party,
unless required by applicable law or regulation or order of a court of competent
jurisdiction.
SECTION 7.12 GOVERNING LAW. THE LAWS OF THE STATE OF DELAWARE SHALL GOVERN
THIS AGREEMENT WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
SECTION 7.13 FURTHER ASSURANCES. After the Closing, Sellers and Purchaser
will execute any documents, instruments or conveyances that may be reasonably
necessary to effectuate the transfer of the Teletouch Securities.
SECTION 7.14 SEVERABILITY OF PROVISIONS. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting or impairing the validity or enforceability of such provision in any
other jurisdiction.
SECTION 7.15 HEADINGS. The Article and Section headings and Table of
Contents used or contained in this Agreement are for convenience of reference
only and shall not affect the construction of this Agreement.
SECTION 7.16 TIME. Time is of the essence in this Agreement.
* * * * *
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IN WITNESS WHEREOF, the parties hereto execute this Agreement, effective
as of the date first above written.
TLL PARTNERS, L.L.C
By: /s/ Xxxxxx X. XxXxxxxx
---------------------------------------
Name: Xxxxxx X. XxXxxxxx
Title: President
CIVC PARTNERS I
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: General Partner
CONTINENTAL ILLINOIS VENTURE CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Managing Director
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SCHEDULE 2.1(a)
SELLERS' OWNERSHIP OF TELETOUCH SECURITIES
--------------------------------------------------------------------------------------------------------------------
Teletouch
Series B
Teletouch Preferred
Common Stock Stock
Warrants Warrants
(expressed in (expressed Teletouch Note
Teletouch Teletouch number of in number (original
Sellers Series A Series B shares of shares principal
And Teletouch Preferred Preferred subject to subject to amount on
Other Sellers Common Stock Stock Stock exercise) exercise) August 3, 1995)
--------------------------- ------------ --------- --------- ------------- ----------- ---------------
CIVC --- 11,818 --- 2,660,840 324,173 $7,878,600
Partners 295,649 1,313 36,019 --- --- $875,400
Xxxxxxx X. Xxxxxxx 15 --- --- --- $10,000
Xxxxx X. Xxxxxxx 9 --- --- --- $6,000
Xxxxxxx X. Xxxxxxx 9 --- --- --- $6,000
Xxxxxx X. Xxxxxxxxx 6 --- --- --- $4,000
Xxxx X. Xxxxxxx 15 --- --- --- $10,000
Xxxxxxxx X. Xxxxxxx Trust 15 --- --- --- $10,000
--------------------------------------------------------------------------------------------------------------------
PORTION OF AGGREGATE PURCHASE PRICE PAYABLE TO EACH SELLER
CIVC $716,236.64 (89.5295%)
Partners 79,581.76 (9.94772%)
Xxxxxxx X. Xxxxxxx 909.04 (.11363%)
Xxxxx X. Xxxxxxx 545.44 (.06818%)
Xxxxxxx X. Xxxxxxx 545.44 (.06818%)
Xxxxxx X. Xxxxxxxxx 363.60 (.04545%)
Xxxx X. Xxxxxxx 909.04 (.11363%)
Xxxxxxxx X. Xxxxxxx Trust 909.04 (.11363%)
Total $ 800,000.00
24
SCHEDULE 2.1(b)
ALLOCATION OF OPTION PAYMENTS TO SELLERS
--------------------------------------------------------------------------------
Seller First Option Payment Second Option Payment
--------------------------------------------------------------------------------
CIVC $45,000 $45,000
CIVC Partners I $5,000 $5,000
--------------------------------------------------------------------------------
25
SCHEDULE 2.2
PORTION OF PURCHASE PRICE PAYABLE AT CLOSING
--------------------------------------------------------------
Amounts Paid on Amounts Paid on
Seller Closing Date* Closing Date**
--------------------------------------------------------------
CIVC $671,236.64 $626,236.64
--------------------------------------------------------------
CIVC Partners I $74,581.76 $69,581.76
--------------------------------------------------------------
* If Options are exercised prior to Second Option Payment Date.
** If Options are exercised after payment of Second Option Payment.
--------------------------------------------------------------
Amounts Paid on
Other Sellers Closing Date
--------------------------------------------------------------
Xxxxxxx X. Xxxxxxx $909.04
--------------------------------------------------------------
Xxxxx X. Xxxxxxx $545.44
--------------------------------------------------------------
Xxxxxxx X. Xxxxxxx $545.44
--------------------------------------------------------------
Xxxxxx X. Xxxxxxxxx $363.60
--------------------------------------------------------------
Xxxx X. Xxxxxxx $909.04
--------------------------------------------------------------
Xxxxxxxx X. Xxxxxxx Trust $909.04
--------------------------------------------------------------
26
EXHIBIT A
WIRE TRANSFER ACCOUNTS
CIVC: Bank of America, NT&SA
ABA #000000000
For Credit to: Continental Illinois Venture Corporation
Account No: 00000-00000
PARTNERS: Bank of America, NT&SA
ABA #000000000
For Credit to: Continental Illinois Venture Corporation
Account No: 12339-25160
27
EXHIBIT B
FORM OF RELEASE
28
MUTUAL RELEASE
This Mutual Release ("Release") is made and entered into as of the __
day of _____________, 200__, by and among Continental Illinois Venture
Corporation, a
Delaware corporation ("CIVC"), CIVC Partners I, a
Delaware
limited partnership ("Partners"), each of the other signatories of this Release
under the heading "Sellers" on the signature pages hereto (collectively with
Partners and CIVC, the "Sellers"), TLL Partners, LLC, a
Delaware limited
liability company ("Purchaser"), Teletouch Communications, Inc., a
Delaware
corporation ("Teletouch"), Xxxxxx X. Xxxxxx ("Xxxxxx"), a resident of the State
of __________, Xxxxxx X. Xxx Xxxx, Xx. ("Xxx Xxxx"), a resident of the State of
___________, and Xxxxxxxxxxx X. Xxxxx ("Perry"), a resident of the State of
________________.
RECITALS
WHEREAS, pursuant to the Option and Securities Agreement dated as of
August 24, 2001, by and among Purchaser and the Sellers (the "Agreement") each
Seller granted Purchaser an option to buy all of such Seller's respective right,
title and interest in the Teletouch Securities (as defined in the Agreement);
and
WHEREAS, Purchaser has exercised the option in accordance with the
Agreement and has purchased the Teletouch Securities effective as of the date
hereof; and
WHEREAS, Xxxxxx, Xxx Xxxx and Xxxxx ("CIVC Representatives") either
have or have had a relationship with CIVC and Partners during such time that
CIVC and Partners owned Teletouch Securities and as a result of such
relationship have each served on the Board of Directors of Teletouch; and
29
WHEREAS, the parties hereto desire to achieve finality regarding the
Sellers' and the CIVC Representatives' respective relationships with Teletouch;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Agreement and other good
and valuable consideration, the receipt, sufficiency and adequacy of which are
hereby acknowledged, and on the terms and subject to the conditions contained
herein, the signatories hereto hereby agree as follows. All defined terms not
otherwise defined herein shall have the meanings ascribed to them in the
Agreement.
ARTICLE I
EFFECTIVENESS OF RELEASE
This Release is effective at the time of the completion of the Closing
of the purchase and sale of the Teletouch Securities on the Closing Date
pursuant to the Agreement.
ARTICLE II
MUTUAL RELEASES
SECTION 2.1 RELEASE BY SELLERS. Except as provided in Section 3.4
below, the Sellers and the CIVC Representatives (on behalf of themselves and
each of their successors, assigns and Affiliates), hereby release, acquit and
discharge Purchaser, Teletouch and each of their personal representatives,
affiliated companies, employees, former employees, agents, attorneys, certified
public accountants, financial advisors, legal representatives, general partners,
limited partners, officers, directors, shareholders, successors, and assigns
including Xxxxxx X. XxXxxxxx (the "Other Parties"), of and from any and all
existing known and unknown claims, demands, and causes of action for all
existing known and unknown damages (including, without limitation, punitive and
exemplary damages) and remedies, which have accrued or may accrue to any of the
Sellers or CIVC Representatives on account of any matter related to the
Teletouch Securities or any Seller's or CIVC
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Representative's relationship with Teletouch as a holder of the Teletouch
Securities or, subject to Section 3.4, as an owner, director or officer or
former owner, director or officer of Teletouch, including but not limited to,
all claims, demands, and causes of action of any nature, whether in contract or
in tort, whether based upon intentional or non-intentional conduct, or arising
under or by virtue of any statute or regulation, that are now recognized by law
or that may be created or recognized in the future by any manner, including but
not limited to causes of action for: all actual damages, all exemplary and
punitive damages, all penalties of any kind, any claim of injury, including
claims of breach of fiduciary duty, attorneys fees, expenses, and prejudgment
and post-judgment interest, whether arising before or after the Closing Date and
whether such claims are heretofore or hereafter accruing, whether asserted or
unasserted, known or unknown, that any Seller or CIVC Representative now have or
in the future may have against Purchaser, Teletouch and the Other Parties
(collectively, the "Released Parties"), other than any breach of this Release.
SECTION 2.2 RELEASE BY PURCHASER AND TELETOUCH. Except as provided in
Section 3.4 below, the Purchaser and Teletouch (on behalf of themselves and each
of their successors, assigns and Affiliates) hereby release, acquit and
discharge the Sellers and the CIVC Representatives and each of their personal
representatives, affiliated companies, employees, former employees, agents,
attorneys, certified public accountants, financial advisors, legal
representatives, general partners, limited partners, officers, directors,
shareholders, successors, and assigns (the "Other Seller Parties"), of and from
any and all existing known and unknown claims, demands, and causes of action for
all existing known and unknown damages (including, without limitation, punitive
and exemplary damages) and remedies, which have accrued or may accrue to the
Purchaser or Teletouch on account of any matter related to the Teletouch
Securities or any Seller's or CIVC Representative's relationship with Teletouch,
including a relationship as a holder of the Teletouch Securities or as an
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owner, director or officer or former owner, director or officer of Teletouch,
including but not limited to all claims, demands, and causes of action of any
nature, whether in contract or in tort, whether based upon intentional or
non-intentional conduct, or arising under or by virtue of any statute or
regulation, that are now recognized by law or that may be created or recognized
in the future by any manner, including but not limited to causes of action for:
all actual damages, all exemplary and punitive damages, all penalties of any
kind, any claim of injury, including claims of breach of fiduciary duty,
attorneys fees, expenses, and prejudgment and post-judgment interest, whether
arising before or after the Closing Date and whether such claims are heretofore
or hereafter accruing, whether asserted or unasserted, known or unknown, that
Purchaser or Teletouch now have or in the future may have against the Sellers
and the Other Seller Parties (collectively, the "Seller Released Parties"),
other than any breach of this Release.
SECTION 2.3 AUTHORITY OF SIGNATORIES. (a) Each of the Sellers and the
CIVC Representatives expressly warrants to the Released Parties that it is
legally competent and, if an entity, has the corporate, partnership or trust
power and authority to execute this Release, that it is authorized to bind
itself and its affiliates to the terms and provision of this Release and by
executing this Release hereby binds itself and its affiliates to the terms and
provisions hereof, that it has not made any promise or agreement to Teletouch or
the Purchaser except as expressed in this Release or pursuant to the Agreement
nor has it made any promise or agreement contrary thereto, that its execution,
delivery and performance of this Release does not conflict with or result in
default under any other agreement to which it is a party, that each Seller and
CIVC Representative is relying on its own judgment and is represented by an
attorney of its own choosing in this matter or had the opportunity to be
represented by an attorney of its own choosing in this matter, that respective
attorney for each has explained the contents of this Release to it and explained
the legal
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consequences of this Release, and that each Seller and CIVC Representative
understands that this Article II shall, at the Closing Date, operate as a full,
complete, and final release and settlement of all possible claims and causes of
action relating to the matters discussed herein, except as otherwise expressly
provided herein.
(b) Each of the Purchaser and Teletouch expressly warrants to the
Seller Released Parties that it is legally empowered to execute this Release,
that it is authorized to bind itself and its affiliates to the terms and
provision of this Release and by executing this Release hereby binds its
affiliates to the terms and provisions hereof, that neither Purchaser nor
Teletouch has made any promise or agreement to any Seller or CIVC Representative
except as expressed in this Release or pursuant to the Agreement, nor have they
made any promise or agreement contrary thereto, that their execution, delivery
and performance of this Release does not conflict with or result in a default
under any other agreement to which they are a party, that Purchaser and
Teletouch are relying on their own judgment and each is represented by an
attorney of its own choosing in this matter, that Purchaser's and Teletouch's
attorneys have explained the contents of this Release to them and explained the
legal consequences of this Release, and that Purchaser and Teletouch understand
that this Article II shall, at the Closing Date, operate as a full, complete,
and final release and settlement of all possible claims and causes of action
relating to the matters discussed herein, except as otherwise expressly provided
herein.
ARTICLE III
MISCELLANEOUS
SECTION 3.1 NO ADMISSION. Neither the execution nor the delivery of
this Release, nor the performance of the terms hereof, by any of the parties
hereto shall be considered an admission by any of them of any present or past
wrongdoing or liability, and any and all such alleged admissions or liabilities
are hereby expressly denied by all of the parties hereto.
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SECTION 3.2 OWNERSHIP OF CLAIMS. (a) Each of the Sellers and the CIVC
Representatives warrant to the Released Parties that such party is the sole
owner of, and it has not sold, assigned or otherwise transferred (with or
without consideration) to any person, any claims, liabilities, demands,
obligations, rights, damages, costs, expenses or causes of action or interests
resulting from any matter, related to the Teletouch Securities and each Seller's
and CIVC Representative's relationship with Teletouch as a holder of the
Teletouch Securities, being released hereby.
(b) Each of Purchaser and Teletouch warrants to the Seller Released
Parties that such party is the sole owner of, and it has not sold, assigned or
otherwise transferred (with or without consideration) to any person, any claims,
liabilities, demands, obligations, rights, damages, costs, expenses or causes of
action, or interests resulting from any matter, related to the Teletouch
Securities and Purchaser's relationship with Teletouch as a holder of the
Teletouch Securities, being released hereby.
SECTION 3.3 COVENANTS NOT TO XXX. It is the intent of the parties
that the mutual consideration received pursuant to this Release and the
Agreement satisfies and finally resolves all controversies that have arisen or
may arise between or among them in all capacities relating to or arising out of
any matter related to the Teletouch Securities and the parties relationship with
Teletouch as a holder of a Teletouch Security and each of the parties agrees
that such controversies are hereby satisfied and resolved. It is expressly
intended and agreed that no party hereto shall assert against any other party on
his or its behalf, or on behalf of any person not a signatory hereto, any claim
based on the matters encompassed by the mutual releases contained herein.
SECTION 3.4 RELATED AGREEMENTS. Notwithstanding anything contained
herein to the contrary, this Release does not modify, release or in any way
alter the obligations and liabilities of any party hereto under Sections 7.1 and
7.2 of the Agreement. Further, notwithstanding anything
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34
herein that may be construed to the contrary, this Release shall not restrict or
limit the right of the CIVC Representatives to indemnification for claims of
third parties within the coverage of any insurance policy issued to Teletouch
for the benefit of its directors and officers, provided that such third party
claims are not brought by or on behalf of any Seller, CIVC Representative or any
of their respective Affiliates. The Certificate of Incorporation and the By-Laws
of Teletouch shall contain the provisions with respect to indemnification and
exculpation from liability set forth in Teletouch's Certificate of Incorporation
and By-Laws on the date of this Agreement, which provisions shall not be
amended, repealed or otherwise modified for a period of six years from the
Closing Date in any manner that would adversely affect the rights thereunder of
individuals who on or prior to the Closing Date were directors, officers,
employees or agents of Teletouch, unless such modification is required by law.
In addition, during such period, Teletouch shall use commercially reasonable
efforts to maintain in effect its current directors' and officers' liability
insurance covering those persons who are currently covered on the date of this
Agreement by its directors' and officers' liability insurance policy (the
"Indemnified Parties"); provided that (i) Teletouch may substitute for its
current policies with at least the same coverage containing terms and conditions
which are no less advantageous and provided that said substitution does not
result in any gaps or lapses in coverage with respect to matters occurring prior
to the Closing Date or, if such insurance coverage is not otherwise available,
cause Teletouch's directors' and officers' liability insurance then in effect to
cover those persons who are covered on the date of this Agreement by any such
insurance policy with respect to those matters covered by such insurance policy,
and (ii) as used in this Section 3.4, "commercially reasonable efforts" shall
take into account, inter alia, the cost of maintaining any insurance required
under this Section 3.4 in relation to Teletouch's financial condition.
-7-
35
SECTION 3.5 MULTIPLE COUNTERPARTS. This Release may be executed in
multiple counterparts, each of which shall be deemed to be and have the same
force and effect of an original, and all of which, taken together, shall
constitute and be construed as a single agreement.
SECTION 3.6 CONSTRUCTION. This Release shall not be construed against
any party because of such party's involvement in the preparation or drafting of
this Release or the Agreement.
SECTION 3.7 ILLEGALITY. If any provision of this Release is held to
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable and shall in no
way affect the validity or enforceability of this Release or any other provision
herein.
SECTION 3.8 ENTIRE AGREEMENT. This Release constitutes the entire
agreement among the parties as to the matters set forth herein and supersedes
any and all prior agreements or representations with respect to such matters,
whether written or oral, all of which are hereby waived, except for the
agreements and representations referred to or set forth in this Release. The
parties to this Release represent and agree that in deciding to enter into this
Release, they have not relied on any information and/or representation from any
other party or their agents that are not expressly contained in this Release and
that each party has relied solely on its own judgment after obtaining advice of
legal counsel who has read and explained to each such party the entire contents
of this Release in full.
SECTION 3.9 GOVERNING LAW. THIS RELEASE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE REGARDLESS OF THE
LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE PRINCIPLES OF CONFLICTS OF
LAW. Each of the Sellers, CIVC Representatives, Purchaser and Teletouch
irrevocably: (a) agrees that process may be served upon it in any manner
authorized
-8-
36
by the laws of the State of Texas for such signatory; and (b) covenants not to
assert or plead any objection which it might otherwise have to such jurisdiction
and such process.
IN WITNESS WHEREOF, each of the undesigned has signed, or caused one of
its duly authorized representatives to sign, this Release as of the date first
above written.
PURCHASER:
TLL PARTNERS, LLC
By:
-------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
SUBSCRIBED AND SWORN to before me by ____________________ on this _____
day of ______, 200_.
---------------------------------------------
Notary Public, State of __________
TELETOUCH:
TELETOUCH COMMUNICATIONS, INC.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
SUBSCRIBED AND SWORN to before me by ____________________ on this _____
day of ____________, 200__.
---------------------------------------------
Notary Public, State of __________
-9-
37
SELLERS:
CIVC PARTNERS I
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
SUBSCRIBED AND SWORN to before me by ____________________ on this _____
day of _______, 200__.
---------------------------------------------
Notary Public, State of __________
CONTINENTAL ILLINOIS VENTURE CORPORATION
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
SUBSCRIBED AND SWORN to before me by ____________________ on this _____
day of _______, 200__.
---------------------------------------------
Notary Public, State of __________
---------------------------------------------
XXXXXXX X. XXXXXXX
SUBSCRIBED AND SWORN to before me by Xxxxxxx X. Xxxxxxx on this _____
day of _________, 200__.
---------------------------------------------
Notary Public, State of __________
-10-
38
---------------------------------------------
XXXXX X. XXXXXXX
SUBSCRIBED AND SWORN to before me by Xxxxx X. Xxxxxxx on this _____ day
of _________, 200__.
---------------------------------------------
Notary Public, State of __________
---------------------------------------------
XXXXXXX X. XXXXXXX
SUBSCRIBED AND SWORN to before me by Xxxxxxx X. Xxxxxxx on this _____
day of _________, 200__.
--------------------------------------------
Notary Public, State of __________
---------------------------------------------
XXXXXX X. XXXXXXXXX
SUBSCRIBED AND SWORN to before me by Xxxxxx X. Xxxxxxxxx on this _____
day of _________, 200__.
---------------------------------------------
Notary Public, State of __________
---------------------------------------------
XXXX X. XXXXXXX
SUBSCRIBED AND SWORN to before me by Xxxx X. Xxxxxxx on this _____ day
of _________, 200__.
--------------------------------------------
Notary Public, State of __________
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39
XXXXXXXX XXXXXXX TRUST
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
SUBSCRIBED AND SWORN to before me by ____________________ on this _____
day of _________, 200__.
---------------------------------------------
Notary Public, State of __________
CIVC REPRESENTATIVES:
---------------------------------------------
XXXXXX X. XXXXXX
SUBSCRIBED AND SWORN to before me by Xxxxxx X. Xxxxxx on this _____ day
of _________, 200__.
---------------------------------------------
Notary Public, State of __________
---------------------------------------------
XXXXXX X. XXX XXXX, XX.
SUBSCRIBED AND SWORN to before me by Xxxxxx X. Xxx Xxxx, Xx. on this
_____ day of _________, 200__.
--------------------------------------------
Notary Public, State of __________
---------------------------------------------
XXXXXXXXXXX X. XXXXX
SUBSCRIBED AND SWORN to before me by Xxxxxxxxxxx X. Xxxxx on this _____
day of _________, 200__.
---------------------------------------------
Notary Public, State of __________
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40
EXHIBIT C
FORM OF LEGAL OPINION OF SELLERS' COUNSEL
41
FORM OF OPINION
TLL Partners, L.L.C. K&E DRAFT 8/21/01
000 Xxxxx Xxxxxxx
Xxxxx 0000
Xxxxx, Xxxxx 00000
We are issuing this opinion letter in our capacity as special legal
counsel to Continental Illinois Venture Corporation ("CIVC") and CIVC Partners I
("Partners") in response to the requirement in Section ______ of the
Option and
Securities Purchase Agreement dated as of August ___, 2001 (the "Agreement"),
between CIVC, Partners and TLL Partners, L.L.C. (herein called "you").
Subject to the assumptions, qualifications, exclusions and other
limitations which are identified in this letter and in the schedules attached to
this letter, we advise you that:
1. CIVC is a corporation existing and in good standing under the General
Corporation Law of the State of Delaware. Partners is a partnership formed
and in good standing under the Delaware Revised Uniform Limited
Partnership Act.
2. CIVC has the corporate power to enter into and perform its obligations
under the Agreement. Partners has the partnership power to enter into and
perform its obligations under the Agreement.
3. CIVC's board of directors and the board of directors of Partner's general
partner each have adopted by requisite vote the resolutions necessary to
authorize CIVC's and Partners' execution, delivery and performance of the
Agreement and CIVC and Partners each have taken all other actions that may
be required to be taken under their respective governing documents to
execute and deliver the Agreement. No additional approval is required, in
the case of CIVC, under its certificate of incorporation or bylaws or, in
the case of Partners, under its equivalent governing documents.
4. Each of CIVC and Partners has duly executed and delivered the Agreement.
5. The Agreement is a valid and binding obligation of each of CIVC and
Partners and is enforceable against CIVC and Partners in accordance with
its terms.
6. The execution, delivery and performance of the Agreement by CIVC do not
and will not conflict with or violate its Certificate of Incorporation or
Bylaws and the execution, delivery
42
and performance by Partners do not and will not conflict with or violate
its certificate of formation or its partnership agreement.
In preparing this letter, we have relied without any independent
verification upon the assumptions recited in Schedule B to this letter and upon:
(i) information contained in certificates obtained from governmental
authorities; (ii) factual information represented to be true in the Agreement;
(iii) factual information provided to us in the Support Certificates signed and
delivered to us as of the date hereof by CIVC and Partners, respectively; and
(iv) factual information we have obtained from such other sources as we have
deemed reasonable. We have assumed without investigation that there has been no
relevant change or development between the dates as of which the information
cited in the preceding sentence was given and the date of this letter and that
the information upon which we have relied is accurate and does not omit
disclosures necessary to prevent such information from being misleading. For
purposes of each opinion in paragraph 1, we have relied exclusively upon a
certificate issued by a governmental authority in each relevant jurisdiction,
and such opinion is not intended to provide any conclusion or assurance beyond
that conveyed by that certificate.
While we have not conducted any independent investigation to determine
facts upon which our opinions are based or to obtain information about which
this letter advises you, we confirm that we do not have any actual knowledge
which has caused us to conclude that our reliance and assumptions cited in the
preceding paragraph are unwarranted or that any information supplied in this
letter is wrong. The term "actual knowledge" whenever it is used in this letter
with respect to our firm means conscious awareness at the time this letter is
delivered on the date it bears by Xxxxx X. Xxxxxxxxxx, the only Xxxxxxxx & Xxxxx
lawyer who had significant involvement with negotiation or preparation of the
Agreement (herein called "our Designated Transaction Lawyer").
Our advice on every legal issue addressed in this letter is based
exclusively on the internal law of Illinois or the federal law of the United
States except that the opinions in paragraphs 1 through 4 are based on the
Delaware General Corporation Law and the Delaware Revised Uniform Limited
Partnership Act. Issues addressed by this letter may be governed in whole or in
part by other laws, but we express no opinion as to whether any relevant
difference exists between the laws upon which our opinions are based and any
other laws which may actually govern. Our opinions are subject to all
qualifications in Schedule A and do not cover or otherwise address any law or
legal issue which is identified in the attached Schedule C or any provision in
the Agreement of any type identified in Schedule D. Provisions in the Agreement
which are not excluded by Schedule D or any other part of this letter or its
attachments are called the "Relevant Agreement Terms."
Our advice on each legal issue addressed in this letter represents our
opinion as to how that issue would be resolved were it to be considered by the
highest court of the jurisdiction upon whose law our opinion on that issue is
based. The manner in which any particular issue would be treated in any actual
court case would depend in part on facts and circumstances particular to the
case, and this letter is not intended to guarantee the outcome of any legal
dispute which may arise in the future. It is possible that some Relevant
Agreement Terms may not prove enforceable for reasons other than those cited in
this letter should an actual enforcement action be brought, but (subject to all
the exceptions, qualifications, exclusions and other limitations contained in
this letter) such
43
unenforceability would not in our opinion prevent you from realizing the
principal benefits purported to be provided by the Relevant Agreement Terms.
This letter speaks as of the time of its delivery on the date it bears. We
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which our Designated Transaction Lawyer did
not have actual knowledge at that time, by reason of any change subsequent to
that time in any law covered by any of our opinions, or for any other reason.
The attached schedules are an integral part of this letter, and any term defined
in this letter or any schedule has that defined meaning wherever it is used in
this letter or in any schedule to this letter.
You may rely upon this letter only for the purpose served by the provision
in the Agreement cited in the initial paragraph of this letter in response to
which it has been delivered. Without our written consent: (i) no person other
than you may rely on this letter for any purpose; (ii) this letter may not be
cited or quoted in any financial statement, prospectus, private placement
memorandum or other similar document; (iii) this letter may not be cited or
quoted in any other document or communication which might encourage reliance
upon this letter by any person or for any purpose excluded by the restrictions
in this paragraph; and (iv) copies of this letter may not be furnished to anyone
for purposes of encouraging such reliance.
Sincerely,
Xxxxxxxx & Xxxxx
44
SCHEDULE A
GENERAL QUALIFICATIONS
All of our opinions ("our opinions") in the letter to which this Schedule
is attached ("our letter") are subject to each of the qualifications set forth
in this Schedule.
1. Bankruptcy and Insolvency Exception. Each of our opinions is subject
to the effect of bankruptcy, insolvency, reorganization, receivership,
moratorium and other similar laws. This exception includes:
1. the Federal Bankruptcy Code and thus comprehends, among others,
matters of turn-over, automatic stay, avoiding powers, fraudulent
transfer, preference, discharge, conversion of a non-recourse
obligation into a recourse claim, limitations on ipso facto and
anti-assignment clauses and the coverage of pre-petition security
agreements applicable to property acquired after a petition is
filed;
2. all other Federal and state bankruptcy, insolvency, reorganization,
receivership, moratorium, arrangement and assignment for the benefit
of creditors laws that affect the rights of creditors generally or
that have reference to or affect only creditors of specific types of
debtors;
3. state fraudulent transfer and conveyance laws; and
4. judicially developed doctrines in this area, such as substantive
consolidation of entities and equitable subordination.
2. Equitable Principles Limitation. Each of our opinions is subject to the
effect of general principles of equity, whether applied by a court of law
or equity. This limitation includes principles:
1. governing the availability of specific performance, injunctive
relief or other equitable remedies, which generally place the award
of such remedies, subject to certain guidelines, in the discretion
of the court to which application for such relief is made;
2. affording equitable defenses (e.g., waiver, laches and estoppel)
against a party seeking enforcement;
3. requiring good faith and fair dealing in the performance and
enforcement of a contract by the party seeking its enforcement;
4. requiring reasonableness in the performance and enforcement of an
agreement by the party seeking enforcement of the contract;
A-1
45
5. requiring consideration of the materiality of (i) a breach and (ii)
the consequences of the breach to the party seeking enforcement;
6. requiring consideration of the impracticability or impossibility of
performance at the time of attempted enforcement; and
7. affording defenses based upon the unconscionability of the enforcing
party's conduct after the parties have entered into the contract.
3. Other Common Qualifications. Each of our opinions is subject to the effect
of rules of law that:
1. limit or affect the enforcement of provisions of a contract that
purport to waive, or to require waiver of, the obligations of good
faith, fair dealing, diligence and reasonableness;
2. provide that forum selection clauses in contracts are not
necessarily binding on the court(s) in the forum selected;
3. limit the availability of a remedy under certain circumstances where
another remedy has been elected;
4. provide a time limitation after which a remedy may not be enforced;
5. limit the enforceability of provisions releasing, exculpating or
exempting a party from, or requiring indemnification of a party for,
liability for its own action or inaction, to the extent the action
or inaction involves negligence, recklessness, willful misconduct,
unlawful conduct, violation of public policy or litigation against
another party determined adversely to such party;
6. may, where less than all of a contract may be unenforceable, limit
the enforceability of the balance of the contract to circumstances
in which the unenforceable portion is not an essential part of the
agreed exchange;
7. govern and afford judicial discretion regarding the determination of
damages and entitlement to attorneys' fees and other costs;
8. may permit a party that has materially failed to render or offer
performance required by the contract to cure that failure unless (i)
permitting a cure would unreasonably hinder the aggrieved party from
making substitute arrangements for performance, or (ii) it was
important in the circumstances to the aggrieved party that
performance occur by the date stated in the contract.
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46
SCHEDULE B
ASSUMPTIONS
For purposes of our letter, we have relied, without investigation, upon
each of the following assumptions:
4. CIVC and Partners (i) has the requisite title and rights to any property
involved in the transactions effected under the Agreement (herein called
the "Transactions").
5. You are existing and in good standing in your jurisdiction of
organization.
6. The Agreement constitutes valid and binding obligations of yours and are
enforceable against you in accordance with their terms (subject to
qualifications, exclusions and other limitations similar to those
applicable to our letter).
7. You have satisfied those legal requirements that are applicable to you to
the extent necessary to entitle you to enforce the Agreement against CIVC
and Partners.
8. Each document submitted to us for review is accurate and complete, each
such document that is an original is authentic, each such document that is
a copy conforms to an authentic original, and all signatures (other than
those of or on behalf of CIVC and Partners) on each such document are
genuine.
9. There has not been any mutual mistake of fact or misunderstanding,
fraud, duress or undue influence.
10. The conduct of the parties to the Agreement has complied with any
requirement of good faith, fair dealing and conscionability.
11. You have acted in good faith and without notice of any defense against the
enforcement of any rights created by, or adverse claim to any property or
security interest transferred or created as part of, the Transactions.
12. There are no agreements or understandings among the parties, written or
oral, and there is no usage of trade or course or prior dealing among the
parties that would, in either case, define, supplement or qualify the
terms of the Agreement.
13. The constitutionality or validity of a relevant statute, rule,
regulation or agency action is not in issue.
14. All parties to the Transactions will act in accordance with, and will
refrain from taking any action that is forbidden by, the terms and
conditions of the Agreement.
X-0
00
00. All agreements other than the Agreement with respect to which we have
reviewed in connection with our letter would be enforced as written.
16. CIVC and Partners will not in the future take any discretionary action
(including a decision not to act) permitted under the Agreement that would
result in a violation of law or constitute a breach or default under any
other agreements or court orders to which CIVC and Partners may be
subject.
17. CIVC and Partners will in the future obtain all permits and governmental
approvals required, and will in the future take all actions required,
relevant to the consummation of the Transactions or performance of the
Agreement.
18. All information required to be disclosed in connection with any consent or
approval by CIVC's Board of Directors or stockholders (and equivalent
governing group of Partners) and all other information required to be
disclosed in connection with any issue relevant to our opinions has in
fact been fully and fairly disclosed to all persons to whom it is required
to be disclosed.
19. CIVC's certificate of incorporation and equivalent governing instrument of
Partners, all amendments to such instruments, all resolutions adopted
establishing classes or series of stock or other equity securities under
such instruments, CIVC's bylaws and all amendments to its bylaws have been
adopted in accordance with all applicable legal requirements.
20. Each person who has taken any action relevant to any of our opinions in
the capacity of director or officer was duly elected to that director or
officer position and held that position when such action was taken.
B-2
48
SCHEDULE C
EXCLUDED LAW AND LEGAL ISSUES
None of the opinions or advice contained in our letter covers or otherwise
addresses any of the following laws, regulations or other governmental
requirements or legal issues:
21. Federal securities laws and regulations (including the Investment Company
Act of 1940 and all other laws and regulations administered by the United
States Securities and Exchange Commission), state "Blue Sky" laws and
regulations, and laws and regulations relating to commodity (and other)
futures and indices and other similar instruments;
22. pension and employee benefit laws and regulations (e.g., ERISA);
23. Federal and state antitrust and unfair competition laws and regulations;
24. Federal and state laws and regulations concerning filing and notice
requirements other than requirements applicable to charter-related
documents such as a certificate of merger;
25. compliance with fiduciary duty requirements;
26. the statutes and ordinances, the administrative decisions and the rules
and regulations of counties, towns, municipalities and special political
subdivisions (whether created or enabled through legislative action at the
Federal, state or regional level -- e.g., water agencies, joint power
districts, turnpike and tollroad authorities, rapid transit districts or
authorities, and port authorities) and judicial decisions to the extent
that they deal with any of the foregoing;
27. the characterization of a transaction as one involving the creation of a
lien on real property or a security interest in personal property, the
characterization of a contract as one in a form sufficient to create a
lien or a security interest, the creation, attachment, perfection,
priority or enforcement of a lien on real property or a security interest
in personal property or matters involving ownership or title to any real
or personal property;
28. fraudulent transfer and fraudulent conveyance laws;
29. Federal and state environmental laws and regulations;
30. Federal and state land use and subdivision laws and regulations;
31. Federal and state tax laws and regulations;
32. Federal patent, trademark and copyright, state trademark, and other
Federal and state intellectual property laws and regulations;
C-1
49
33. Federal and state racketeering laws and regulations (e.g., RICO);
34. Federal and state health and safety laws and regulations (e.g., OSHA);
35. Federal and state labor laws and regulations;
36. Federal and state laws, regulations and policies concerning (i) national
and local emergency, (ii) possible judicial deference to acts of sovereign
states, and (iii) criminal and civil forfeiture laws;
37. other Federal and state statutes of general application to the extent
they provide for criminal prosecution (e.g., mail fraud and wire fraud
statutes);
38. any laws, regulations, directives and executive orders that prohibit or
limit the enforceability of obligations based on attributes of the
party seeking enforcement (e.g., the Trading with the Enemy Act and the
International Emergency Economic Powers Act); and
39. the effect of any law, regulation or order which hereafter becomes
effective.
We have not undertaken any research for purposes of determining whether
CIVC, Partners or any of the Transactions which may occur in connection with the
Agreement is subject to any law or other governmental requirement other than to
those laws and requirements which in our experience would generally be
recognized as applicable in the absence of research by lawyers in Illinois, and
none of our opinions covers any such law or other requirement unless (i) our
Designated Transaction Lawyer had actual knowledge of its applicability at the
time our letter was delivered on the date it bears and (ii) it is not excluded
from coverage by other provisions in our letter or in any Schedule to our
letter.
C-2
50
SCHEDULE D
EXCLUDED PROVISIONS
None of the opinions in the letter to which this Schedule is attached
covers or otherwise addresses any of the following types of provisions which may
be contained in the Transaction Agreement:
40. Choice-of-law provisions.
41. Covenants not to compete, including without limitation covenants not to
interfere with business or employee relations, covenants not to solicit
customers, and covenants not to solicit or hire employees.
42. Indemnification for negligence, willful misconduct or other wrongdoing or
strict product liability or any indemnification for liabilities arising
under securities laws.
43. Provisions mandating contribution towards judgments or settlements
among various parties.
44. Waivers of (i) legal or equitable defenses, (ii) rights to damages, (iii )
rights to counter claim or set off, (iv) statutes of limitations, (v)
rights to notice, (vi) the benefits of statutory, regulatory, or
constitutional rights, unless and to the extent the statute, regulation,
or constitution explicitly allows waiver, (vii) broadly or vaguely stated
rights, and (viii) other benefits to the extent they cannot be waived
under applicable law.
45. Provisions providing for forfeitures or the recovery of amounts deemed to
constitute penalties, or for liquidated damages, acceleration of future
amounts due (other than principal) without appropriate discount to present
value, late charges, prepayment charges, interest upon interest, and
increased interest rates upon default.
46. Time-is-of-the-essence clauses.
47. Provisions which provide a time limitation after which a remedy may not
be enforced.
48. Confession of judgment clauses.
49. Agreements to submit to the jurisdiction of any particular court or other
governmental authority (either as to personal jurisdiction and subject
matter jurisdiction); provisions restricting access to courts; waiver of
the right to jury trial; waiver of service of process requirements which
would otherwise be applicable; and provisions otherwise purporting to
affect the jurisdiction and venue of courts.
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00
00. Provisions that attempt to change or waive rules of evidence or fix the
method or quantum of proof to be applied in litigation or similar
proceedings.
51. Provisions appointing one party as an attorney-in-fact for an adverse
party or providing that the decision of any particular person will be
conclusive or binding on others.
52. Provisions purporting to limit rights of third parties who have not
consented thereto or purporting to grant rights to third parties.
53. Provisions which purport to award attorneys' fees solely to one party.
54. Arbitration agreements.
55. Provisions purporting to create a trust or constructive trust without
compliance with applicable trust law.
56. Provisions relating to (i) insurance coverage requirements and (ii) the
application of insurance proceeds and condemnation awards.
57. Provisions that provide for the appointment of a receiver.
58. Provisions or agreements regarding proxies, shareholders agreements,
shareholder voting rights, voting trusts, and the like.
59. Confidentiality agreements.
60. Provisions in the Agreement requiring CIVC or Partners to perform its
obligations under, or to cause any other person to perform its obligations
under, or stating that any action will be taken as provided in or in
accordance with, any agreement or other document other than the Agreement.
61. Provisions, if any, which are contrary to the public policy of any
jurisdiction.
D-2
