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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
PHONETEL TECHNOLOGIES, INC.,
PHONETEL II, INC.
AND
PUBLIC TELEPHONE CORPORATION
DATED OCTOBER 16, 1995
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TABLE OF CONTENTS
PAGE
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ARTICLE I
TERMS OF MERGER; THE CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.1 MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 CONSIDERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.3 CERTIFICATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.4 CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.5 DELIVERIES BY PTC AND SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.6 DELIVERIES BY BUYER AND PHONETEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.7 RELATED MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF . . . . . . . . . . . . . . . . . . . . . . . 7
2.1 ORGANIZATION AND STANDING; SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 ORGANIZATIONAL DOCUMENTS AND CORPORATE
RECORDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 AUTHORIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 SELLER CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.5 CONSENTS AND APPROVALS; NO VIOLATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.6 ABSENCE OF UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.7 ABSENCE OF CERTAIN CHANGES OR EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.8 COMPLIANCE WITH LAWS AND PERMITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.9 LITIGATION AND ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.10 BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.11 SELLER PHONES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.12 TELCO CHARGES AND LOCATION COMMISSION . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.13 DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER AND PHONETEL . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.1 ORGANIZATION AND STANDING; SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . 16
3.2 AUTHORIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.3 CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.4 CONSENTS AND APPROVALS; NO VIOLATION . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.5 ABSENCE OF UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.6 ABSENCE OF CERTAIN CHANGES OF EVENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.7 COMPLIANCE WITH LAWS AND PERMITS . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.8 LITIGATION AND ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.9 TELCO CHARGES AND LOCATION COMMISSIONS . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IV
FURTHER ASSURANCES; COOPERATION . . . . . . . . . . . . . . . . . . . . . . . . 24
4.1 FURTHER ASSURANCES; COOPERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.2 EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
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ARTICLE V
SURVIVAL OF REPRESENTATIONS AND
WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . 25
5.2 INDEMNIFICATION OF BUYER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.3 INDEMNIFICATION OF SELLER SHAREHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . 26
5.4 ASSERTION OF CLAIMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VI
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.1 PARTIES IN INTEREST; NO THIRD PARTY BENEFICIARIES . . . . . . . . . . . . . . . . . 27
6.2 EXHIBITS AND DISCLOSURE SCHEDULE . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.3 ENTIRE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.4 WAIVER OF COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.5 ENFORCEABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.6 COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.7 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.8 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.9 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE VII
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
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INDEX OF EXHIBITS TO
AGREEMENT AND PLAN OF MERGER
A - Certificate of Merger
B - Seller Shareholders Listing
C - Stockholder Representations and Warranties Certificate
D - Registration Rights Agreement
E - Escrow Agreement
F - Non-Competition Agreement - Xxxxxx X. Xxxxxx
G - Non-Competition Agreement - Xxxxx X. Xxxxxx
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AGREEMENT AND PLAN OF MERGER
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This Agreement and Plan of Merger (this "Agreement") is entered into on
this 16th day of October, 1995, by and among PhoneTel Technologies, Inc.
("PhoneTel"), an Ohio corporation, PhoneTel II, Inc. ("Sub" or "Buyer"), an
Ohio corporation and wholly-owned subsidiary of PhoneTel, and Public Telephone
Corporation ("PTC" or "Seller"), an Indiana corporation.
WHEREAS, the parties hereto desire that Sub be merged with and into PTC
in accordance with the terms and conditions herein contained; and
WHEREAS, it is intended that the Merger shall qualify as a tax-free
reorganization pursuant to Section 368 (a) of the Code (as defined herein), and
this Agreement is intended to be and hereby is adopted as a plan of
reorganization within the meaning of Section 368 of the Code.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
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ARTICLE I
TERMS OF MERGER; THE CLOSING
1.1 MERGER. On the date hereof, Sub shall be merged into and with PTC
(the "Merger"). PTC shall be the surviving corporation of the Merger and shall
continue to exist and to be governed by the laws of the State of Indiana. The
Merger shall be consummated pursuant to the terms of this Agreement and the
Articles of merger (substantially in the form attached hereto as Exhibit A)
(the "Articles of Merger"), all of which shall have been approved and adopted
by the Board of Directors and shareholders of PTC, and the Board of Directors
of PhoneTel and Buyer. The Merger shall become effective upon filing the
Articles of Merger with the Secretary of State of the State of Indiana (the
"Secretary of State") in accordance with the Indiana Business Corporation Law
(the "Effective Time"). At the Effective Time, the separate corporate
existence of Sub shall cease and PTC shall continue as the surviving
corporation of the merger and a direct wholly-owned subsidiary of PhoneTel
(which shall continue to operate under the name Public Telephone Corporation).
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1.2 CONSIDERATION. Shareholders of PTC (the "Shareholders"), listed on
Exhibit B attached hereto, shall be entitled to receive, in the aggregate,
1,349,290 shares ("Shares"), of PhoneTel common stock, $.01 par value (the
"Consideration"), in exchange for all of the shares of common stock, no par
value, of PTC (the "Seller Shares"). PROVIDED, HOWEVER, that the Consideration
will be reduced by the aggregate amount of any liabilities of the Seller
(including, but not limited to, payables and costs of termination and
non-competition agreements) which are in excess of $2,212,230 and which are not
offset by cash or cash equivalents (including, but not limited to, receivables)
and provided also that the escrowed shares will be remitted to Phonetel in
applicable amounts to effect any such purchase price reduction; such adjustment
shall not take effect until the aggregate amount of excess liabilities is at
least $50,000 greater than the value of any unrecorded amounts which become due
and payable to PTC subsequent to the closing as proceeds pursuant to
settlements and/or judgments resulting from actions settled or pending as of
the date hereof against the City of Chicago, Illinois and Ameritech, and orders
issued by the Illinois Commerce
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Commission, the FCC and the Michigan Taxing Authority concerning retroactive
tax credits.
1.3 CERTIFICATES. Certificates representing (i) the number of Shares
constituting the Consideration (ii) less 175,000 Shares shall be delivered to a
representative designated by the shareholders (the "Shareholder
Representative"), to be distributed on a pro rata basis to each Shareholder, as
soon as practicable after Closing, in accordance with the percentages set forth
opposite each Shareholder's name on Exhibit B. Certificates representing
175,000 Shares (the "Escrow Shares") will be delivered to Shambaugh, Kast, Xxxx
& Xxxxxxxx, as Escrow Agent, (the "Escrow Agent") pursuant to an escrow
agreement being entered into simultaneously herewith in substantially the form
attached hereto as Exhibit E.
1.4 CLOSING. The consummation of the transactions contemplated hereby
(the "Closing") is taking place at the offices of Skadden, Arps, Slate, Xxxxxxx
& Xxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000 on October 16, 1995 (the "Closing
Date"), simultaneously with the execution of this Agreement, the Certificate of
Merger and the other agreements, documents, instruments and writings executed
and delivered pursuant hereto or in connection herewith (collectively the
"Other Documents").
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1.5 DELIVERIES BY PTC AND SHAREHOLDERS. PTC and the Shareholders are
delivering the following to Buyer and PhoneTel:
(a) Stock certificates representing all of the Seller Shares,
accompanied by stock powers (duly endorsed in blank) or other duly executed
instruments of transfer;
(b) A Stockholder Representations and Warranties Certificate from each
Shareholder, in substantially the form attached hereto as Exhibit C;
(c) A certificate, duly executed by an officer of PTC, representing to
Buyer and PhoneTel that Exhibit B is an accurate and complete list of all
Shareholders and that there are no other Seller Shares issued and outstanding;
and
(d) Certified resolutions of the Board of Directors and the
Shareholders of PTC approving this Agreement, the other Documents and the
transactions contemplated hereby and thereby.
1.6 DELIVERIES BY BUYER AND PHONETEL. Buyer and PhoneTel are
delivering or will deliver the following to Seller:
(a) 1,174,290 Shares, for distribution to Seller Shareholders;
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(b) 175,000 Shares for delivery to the Escrow Agent;
(c) Certified resolutions of the Board of Directors and Shareholders of
Buyer, approving this Agreement and the Other Documents and transactions
contemplated hereby and thereby;
(d) Certified resolutions of the Board of Directors of PhoneTel approving
this Agreement, the Other Documents and the transactions contemplated hereby
and thereby; and
(e) The Certificate of Merger, to be filed with the Secretary of State.
1.7 RELATED MATTERS.
(a) NON-COMPETITION AGREEMENTS. At the closing, Xxxxxx X. Xxxxxx and
Xxxxx X. Xxxxxx are entering into the agreements to not compete with PhoneTel
which are attached hereto as Exhibits F and G, respectively, (the
"Non-Competition Agreements").
(b) REGISTRATION RIGHTS AGREEMENT. At the Closing, PhoneTel and Buyer are
entering into the registration rights agreement which is attached hereto as
Exhibit E (the "Registration Rights Agreement")
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller represents and warrants to Buyer and PhoneTel as follows:
2.1 ORGANIZATION AND STANDING; SUBSIDIARIES.
(a) Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of Indiana. Seller has all requisite
corporate power and authority to own, lease and operate the properties and
assets it now owns, operates and leases and to carry on its business and
operations as currently and heretofore conducted. Schedule 2.1 is a complete
listing of all jurisdictions in which Seller is presently doing business.
Seller is duly qualified or licensed to do business and is in good standing in
all such jurisdictions.
(b) Seller has no subsidiaries. As used in this Agreement, a subsidiary
of an entity shall mean (i) any corporation for which such entity (or any
subsidiary of such entity) is entitled to elect a majority of the directors, by
virtue of its ownership of more than 50% of the outstanding securities having
ordinary voting power, or otherwise, or (ii) any partnership, joint venture or
other entity which such entity (or any subsid-
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iary of such entity) controls, by virtue of its ownership of more than 50% of
the entity, or otherwise.
(c) Seller has taken all actions necessary to enable Buyer to assume,
without any adverse effect, all of Seller's rights and interests in all joint
ventures.
2.2 ORGANIZATIONAL DOCUMENTS AND CORPORATE RECORDS.
(a) Seller has heretofore delivered to Buyer complete and correct copies
of the Articles of Incorporation and Bylaws of Seller, as currently in effect
and including all amendments thereto. The minute books of Seller have been
made available to Buyer for its inspection and contain complete and correct
records of all meetings, and consents in lieu of a meeting, of Seller's Board
of Directors (and any committees thereof) and of Seller's shareholders held or
executed since Seller's incorporation, and such records accurately reflect all
transactions referred to therein. The stock books and ledgers of Seller have
been made available to Buyer for its inspection, and such books and ledgers are
complete and correct in all material respects.
(b) Seller has made available to Buyer all accounting, corporate and
financial books and records
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(the "Accounting Books and Records") which relate to the business of Seller.
2.3 AUTHORIZATION. Seller has the requisite corporate power and authority
to execute, deliver and perform its obligations under this Agreement and the
Other Documents and to consummate the transactions contemplated hereby and
thereby. All corporate proceedings on the part of Seller which are necessary
to execute, deliver and perform this Agreement and the other Documents and to
consummate the transactions contemplated hereby and thereby have been duly
authorized and taken. Upon execution, this Agreement and all Other Documents
to which Seller is a party will constitute valid and binding obligations of
Seller and shall be enforceable against Seller in accordance with their terms.
2.4 SELLER CAPITALIZATION. As of the date hereof, the authorized capital
stock of Seller consists of 15,000,000 shares of Class A common stock, no par
value ("Seller Shares"), 100,000 shares of Class B common stock, no par value,
and 10,000,000 shares of preferred stock, no par value. 966 Seller Shares are
issued and outstanding as of the date hereof, all of which are owned by the
Shareholders. Seller has no other class of capital stock authorized or
outstanding. None of Seller's
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shares of capital stock have been reserved for any purpose. All outstanding
Seller Shares are duly authorized, validly issued, fully paid and nonassessable
and were not issued in violation of any preemptive rights. There are no (i)
options, warrants, calls, commitments, or rights of any character to purchase
or otherwise acquire from Seller shares of capital stock of any class, (ii)
outstanding securities of Seller that are convertible into or exchangeable or
exercisable for shares of any class of capital stock of Seller, (iii) options,
warrants or other rights to purchase from Seller any such convertible or
exchangeable securities, (iv) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance of any
capital stock of Seller, nor (v) options, warrants or rights, pursuant to
which, in any of the foregoing cases, Seller is or would be subject or bound.
2.5 CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution and
delivery of this Agreement and the Other Documents, nor the consummation of the
transactions contemplated hereby or thereby, nor compliance with any of the
provisions hereof, will (a) conflict with any provision of the Articles of
Incorporation or Bylaws (or other similar organizational documents) of Seller,
(b)
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require any consent, waiver, approval, authorization or Permit of, or filing
with or notification to, or any other action by, any Governmental Authority by
Seller, (c) violate any Law or any restriction imposed by any Governmental
Authority which might be applicable to Seller, or by which any of Seller's
business, properties or assets may be bound or affected nor (d) violate,
breach, or conflict with, or constitute (with or without due notice or lapse of
time or both) a default (or give rise to any right of termination, cancellation
or acceleration of any obligation to pay or result in the imposition of any
Encumbrance upon any of the property) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, Encumbrance, contract,
Permit, order or other instrument or obligation to which Seller is a party or
by which any of Seller's business, properties or assets may be bound or
affected
2.6 ABSENCE OF UNDISCLOSED LIABILITIES.
Schedule 2.6 of the Disclosure Schedule sets forth a true, complete and
accurate list of all liabilities of Seller at the Closing, including all
Encumbrances attaching to any of Seller's Assets. Except as set forth on
Schedule 2.6 of the Disclosure Schedule, Seller had no liabilities arising from
or relating to its
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business and operations of any nature (whether absolute, accrued, fixed,
contingent, liquidated, unliquidated or otherwise and whether due or to become
due) and any and all liabilities or obligations incurred since June 30, 1995
were incurred in the ordinary course of business and consistent with past
practice.
2.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth on
Schedule 2.7 of the Disclosure Schedule, since June 30, 1995:
(i) Seller has operated its business in the ordinary course consistent
with past practice;
(ii) there has not been any material adverse change in the business,
results of operations, assets, liabilities, financial condition or (except for
matters which apply to United States businesses generally) any material adverse
change in the prospects of Seller; and
(iii) Seller has not incurred any material damage, destruction or loss
(whether or not covered by insurance) to its owned or leased property or
assets.
2.8 COMPLIANCE WITH LAWS AND PERMITS.
(a) The business and operation of Seller have been conducted and are
now being conducted in all
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material respects in compliance with all Laws and Orders of all Governmental
Authorities having jurisdiction over Seller and all Permits relating to any of
its properties or applicable to its business.
(b) Seller possesses all Permits necessary to own and operate its property
and assets and to conduct its business as it is currently conducted. Such
Permits are valid, subsisting in full force and effect, and Seller has
fulfilled its material obligations under each of the Permits, and no event has
occurred or condition or state of facts exists which constitutes or, after
notice or lapse of time or both, would constitute a default or violation under
any of the Permits or would permit revocation or termination of any of the
Permits. No proceeding which might involve the revocation or termination of
any such Permits is pending or, to the knowledge of Seller, threatened.
(c) Seller has made all filings and received all approvals relating to the
Permits which are necessary in order for Buyer to legally and validly own and
operate the property and assets of Seller and to conduct Seller's business as
it is currently and has heretofore been conducted.
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2.9 LITIGATION AND ARBITRATION.
(a) No claim, action, cause of action, suit, proceeding, inquiry,
investigation or Order by or before any Governmental Authority, administrative
body or arbitration or mediation panel is pending or, to the best of Seller's
knowledge, threatened, against Seller or which is otherwise pending or
threatened and might affect the business, operations, or assets of Seller,
except as set forth on Schedule 2.9 of the Disclosure Schedule. No order of
any Governmental Authority, arbitrator or mediator is outstanding against
Seller, its business, operations or assets. Seller has no knowledge of any
fact or circumstance which would reasonably be expected to result in any other
claim, action, cause of action, suit, proceeding, inquiry, investigation or
Order being filed which would be against Seller or which might affect its
business, operations or assets.
(b) To the best of Seller's knowledge, no claim, action, suit, proceeding,
inquiry or investigation has been instituted which threatens to restrain or
prohibit or to otherwise challenge the legality or validity of the transactions
contemplated by this Agreement or the Other Documents.
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2.10 BROKERS. Seller has no obligation to pay any brokers, finders,
investment bankers, financial advisors or similar fee in connection with this
Agreement or the other Documents or the transactions contemplated hereby or
thereby, by reason of any action taken by or on behalf of Seller.
2.11 SELLER PHONES. There were at least 1200 Seller Phones in operation as
of the close of business on September 30, 1995. A complete and accurate list
of all Seller Phones is attached hereto as Schedule 2.11 of the Disclosure
Schedule. The aggregate monthly gross revenue as of the date of closing
divided by the number of Seller Phones is greater than $150.00, provided,
however, that Buyer shall have no action against Seller unless the aggregate
monthly gross revenue divided by the number of Seller Phones is less than
$145.00 as of the date of closing.
2.12 TELCO CHARGES AND LOCATION COMMISSION. Seller has paid all telephone
line charges to the local exchange companies and commissions to site location
owners which are due and payable as of the Closing, except as set forth on
Schedule 2.12 of the Disclosure Schedule, or, if not so paid, such unpaid
charges and commissions are immaterial and not likely to have a
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material adverse effect upon the operations of the business of PTC.
2.13 DISCLOSURE. Seller has disclosed to PhoneTel and Buyer any and all
facts which are material to Seller's business, results of operations, assets,
Liabilities, and financial condition. No representation or warranty by Seller
in this Agreement (including the Disclosure Schedule) and no statement by
Seller in any of the Other Documents or previously disclosed to PhoneTel or
Buyer, contains any untrue statement of a material fact or omits to state any
material fact necessary in order to make the statements made herein or therein,
in light of the circumstances under which they were made, not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER AND PHONETEL
PhoneTel and Buyer represent and warrant to Seller as follows:
3.1 ORGANIZATION AND STANDING; SUBSIDIARIES.
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Ohio. Buyer has all requisite
corporate power and authority to own, lease and operate the properties and
assets it now owns, operates and leases and to
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carry on its business and operations as currently and heretofore conducted.
Schedule 3.1 is a complete listing of all jurisdictions in which Buyer is
presently doing business, and Buyer is duly qualified or licensed to do
business and is in good standing in all such jurisdictions.
3.2 AUTHORIZATION. Buyer has the requisite corporate power and authority
to execute, deliver and perform their obligations under this Agreement and the
Other Documents and to consummate the transactions contemplated hereby and
thereby. All corporate proceedings on the part of Buyer which are necessary to
execute, deliver and perform this Agreement and the Other Documents and to
consummate the transactions contemplated hereby and thereby have been duly
authorized and taken. Upon execution, this Agreement and the Other Documents
will constitute valid and binding obligations of Buyer and shall be enforceable
against Buyer in accordance with their terms.
3.3 CAPITALIZATION.
(a) As of the date hereof, the authorized capital stock of Buyer consists
of (i) 22,500,000 Shares, 14,497,107 of which are issued and outstanding, and
(ii) 2,500,000 shares of Preferred Stock, $.01 par value, of
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which (A) 2,125 shares have been designated Preferred Stock, $100 par value, of
which no shares are outstanding; (B) 6,500 shares have been designated
Convertible Preferred Stock, without par value, $100 stated value, cumulative
and redeemable, of which no shares are outstanding; (C) 3,880 shares have been
designated Preferred Stock, without par value, $1,000 stated value, cumulative
and redeemable, of which 1,496 shares are outstanding; (D) 16,000 shares have
been designated as Preferred Stock, without par value, $100 stated value,
cumulative and redeemable, of which 12,200 shares are outstanding; (E) 2,500
shares have been designated 7% Convertible Preferred Stock, without par value,
$100 stated value, cumulative and redeemable, all of which shares are
outstanding; (F) 550,000 shares have been designated as 10% Non-Voting
Preferred Stock, without par value, of which 530,534 shares are outstanding;
and (G) 1,918,995 shares are not yet designated nor issued. PhoneTel has no
other class of capital stock authorized or issued and outstanding. All of the
PhoneTel shares of capital stock issued are duly authorized and validly issued,
fully paid, nonassessable and not issued in violation of any preemptive rights.
0105359.02-New York Server 3a 18 Draft September 29, 1995 - 7:03 pm
23
(b) Except as set forth in Schedule 3.3(b), there are no (i) options,
warrants, calls, commitments or right of any character to purchase or otherwise
acquire from PhoneTel any shares of its capital stock, (ii) outstanding
securities of PhoneTel that are convertible into or exchangeable or exercisable
for shares of any class of stock of PhoneTel, (iii) options, warrants or other
rights to purchase from PhoneTel any such convertible or exchangeable
securities, (iv) contracts, commitments, agreements, understandings or
arrangements of any kind relating to the issuance of any capital stock of
PhoneTel nor (v) any options, warrants or rights, pursuant to which, in any of
the foregoing cases, PhoneTel is or would be subject or bound; no other shares
of PhoneTel's capital stock have been reserved for any purpose.
3.4 CONSENTS AND APPROVALS; NO VIOLATION. Except as set forth on Schedule
3.4 of the Disclosure Schedule, neither the execution and delivery of this
Agreement and the other Documents, nor the consummation of the transactions
contemplated hereby or thereby, nor compliance with any of the provisions
hereof, will conflict with any provision of the Articles of Incorporation or
Code of Regulations (or other similar organizational documents) of Buyer, (b)
require any consent, waiver,
0105359.02-New York Server 3a 19 Draft September 29, 1995 - 7:03 pm
24
approval, authorization or Permit of, or filing with or notification to, or any
other action by, any Governmental Authority by Buyer, (c) violate any Law of
any Governmental Authority which is applicable to Buyer, or by which any of
Buyer's business, properties or assets may be bound or affected nor (d)
violate, breach, or conflict with, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration of any obligation to pay or result in the
imposition of any Encumbrance upon any of the property) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, Encumbrance,
contract, Permit, Order or other instrument or obligation to which Buyer is a
party or by which any of the business, properties or assets of Buyer may be
bound or affected.
3.5 ABSENCE OF UNDISCLOSED LIABILITIES.
(a) Except as set forth on Schedule 3.5 (a) of the Disclosure Schedule,
(i) Buyer had no liabilities arising from or relating to its business and
operations of any nature (whether absolute, accrued, fixed, contingent,
liquidated, unliquidated or otherwise and whether due or to become due) which
were not reflected in the financial statements (the "PhoneTel Financial State-
0105359.02-New York Server 3a 20 Draft September 29, 1995 - 7:03 pm
25
ments") from Form 10QSB for the quarter ended June 30, 1995, and (ii) any
liability or obligation incurred since June 30, 1995, was incurred in the
ordinary course of its business and consistent with past practice.
(b) Schedule 3.5 (b) of the Disclosure Schedule sets forth a true,
complete and accurate list of all liabilities of Buyer as of September 22,
1995.
3.6 ABSENCE OF CERTAIN CHANGES OF EVENTS. Except as set forth on
Schedule 3.6 of the Disclosure Schedule, since June 30, 1995:
(i) Buyer has operated its business in the ordinary course consistent
with past practice;
(ii) there has not been any material adverse change in the business,
results of operations, assets, liabilities, financial condition or (except for
matters which apply to United States businesses generally) any material adverse
change in the prospects of PhoneTel; and
(iii) Buyer has not incurred any material damage, destruction or loss
(whether or not covered by insurance) to its owned or leased property or
assets.
3.7 COMPLIANCE WITH LAWS AND PERMITS.
0105359.02-New York Server 3a 21 Draft September 29, 1995 - 7:03 pm
26
(a) Except as set forth on Schedule 3.7 (a) of the Disclosure Schedule,
the business and operation of Buyer have been conducted and are now being
conducted in all material respects in compliance with all Laws and Orders of
all Governmental Authorities having jurisdiction over Buyer and all Permits
relating to any of its properties or applicable to its business.
(b) Except as set forth on Schedule 3.7(b) of the Disclosure Schedule,
Buyer possesses all Permits necessary to own and operate its property and
assets and to conduct its business as it is currently conducted. Such Permits
are valid, subsisting in full force and effect, and Buyer has fulfilled its
material obligations under each of the Permits, and no event has occurred or
condition or state of facts exists which constitutes or, after notice or lapse
of time or both, would constitute a default or violation under any of the
Permits or world permit revocation or termination of any of the Permits. No
proceeding which might involve the revocation or termination of any such
Permits is pending or, to the knowledge of Buyer, threatened.
(c) Except as set forth on schedule 3.7(c) of the Disclosure Schedule,
Buyer has made all filings and received all approvals in connection with the
Permits
0105359.02-New York Server 3a 22 Draft September 29, 1995 - 7:03 pm
27
which are necessary for Buyer to own and operate the property and assets of
Buyer and to conduct Buyer's business as it is currently and has heretofore
been conducted.
3.8 LITIGATION AND ARBITRATION.
(a) No claim, action, cause of action, suit, proceeding, inquiry,
investigation or Order by or before any Governmental Authority, administrative
body or arbitration or mediation panel is pending or, to the best of Buyer's
knowledge, threatened, against Buyer, except as set forth on Schedule 4.8 of
the Disclosure Schedule. No Order of any Governmental Authority, arbitrator or
mediator is outstanding against Buyer, its business, operations or assets.
Buyer has no knowledge of any fact or circumstance which could reasonably be
expected to result in any other claim, action, cause of action, suit,
proceeding, inquiry, investigation or Order, against Buyer or affect its
business, Operations or assets.
(b) To the best of Buyer's knowledge, no claim, action, suit, proceeding,
inquiry or investigation has been instituted which threatens to restrain or
prohibit or to otherwise challenge the legality or validity of the transactions
contemplated by this Agreement or the Other Documents.
0105359.02-New York Server 3a 23 Draft September 29, 1995 - 7:03 pm
28
3.9 TELCO CHARGES AND LOCATION COMMISSIONS. PhoneTel has paid all
telephone line charges to the local exchange companies and commissions to site
location owners which are due and payable as of the Closing, except as set
forth on Schedule 3.9 of the Disclosure Schedule, or if not so paid, such
unpaid charges and commissions are immaterial and not likely to have a material
adverse effect upon the operations of the business of PhoneTel.
ARTICLE IV
FURTHER ASSURANCES; COOPERATION
4.1 FURTHER ASSURANCES; COOPERATION.
(a) The parties shall from time to time after the Closing, upon the
request of any other party and without further consideration, execute,
acknowledge and deliver in proper form any further instruments or documents,
and take such further actions as such other party may reasonably require, to
carry out effectively the intent of this Agreement and the other Documents.
4.2 EXPENSES. Any expenses incurred by the parties in connection with or
execution of this Agreement and the Other Documents and the consummation of the
transactions contemplated hereby and thereby, including expenses of
accountants, counsel, brokers, finders,
0105359.02-New York Server 3a 24 Draft September 29, 1995 - 7:03 pm
29
financial advisors and other representatives shall be paid by the parties
incurring such expenses.
ARTICLE V
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Seller, Buyer contained herein or made pursuant hereto shall
survive the Closing and any investigation at any time made by or on behalf of
any party hereto until the earlier of (i) six months from the date hereof or
(ii) with respect to representations of Seller which affect the tax liabilities
of Buyer, two years from the date hereof. Notwithstanding the foregoing, if a
claim with respect to a breach of a representation and warranty is made within
the applicable period in accordance with the provisions hereinafter set forth,
such claim and any related claim may continue to be asserted after such period.
5.2 INDEMNIFICATION OF BUYER. The Shareholders of Seller agree to
indemnify Buyer from any Losses incurred by reason of any breach of
representation and warranty or covenant of Seller contained herein; provided,
however, that Buyer shall have a claim only for the value of the loss or losses
which, in the aggregate, exceed $100,000. The escrowed shares will be
available
0105359.02-New York Server 3a 25 Draft September 29, 1995 - 7:03 pm
30
to buyer for the settlement of any claims pursuant to Section 5.4, in addition
to any other remedies to which the buyer may be entitled.
5.3 INDEMNIFICATION OF SELLER SHAREHOLDERS. Buyer agrees to indemnify
Seller's shareholders from any Losses incurred by reason of any breach of a
representation and warranty or covenant of Buyer contained herein; provided,
however, that a party shall have a claim only for the value of the loss or
losses which, in the aggregate, exceed $100,000.
5.4 ASSERTION OF CLAIMS.
(a) The parties shall be free to bring all differences of interpretation
and disputes arising in connection with this Agreement to the attention of the
other at any time without prejudicing their harmonious relationship and
operations hereunder, and the good offices and facilities of either party shall
be available at all times for the prompt and effective adjustment of any and
all such differences, either by mail, telephone or personal meeting under
friendly and courteous circumstances.
(b) If a party claims ("Claiming Party") that it is entitled to
indemnification under this Article, notice of such claim (the "Claim") shall be
given to
0105359.02-New York Server 3a 26 Draft September 29, 1995 - 7:03 pm
31
the party from whom the Claiming Party seeks indemnification. The parties
shall negotiate in good faith to determine the validity and the value of the
Claim. If the parties cannot reach an agreement as to the value of the Claim,
then the Claim shall be submitted to a mutually acceptable party for
arbitration in accordance with the Commercial Rules of the American Arbitration
Association, and the decision of such arbitrator shall be final and binding
upon the parties for all arbitration rulings awarding less than $100,000 in
damages. The prevailing party in any action brought before an arbitrator or
any court shall be entitled to recover such costs, including fees and expenses
of counsel.
ARTICLE VI
MISCELLANEOUS
6.1 PARTIES IN INTEREST; NO THIRD PARTY BENEFICIARIES.
(a) This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the parties hereto and their respective successors and
permitted assigns. This Agreement and the rights and obligations of Seller,
Buyer hereunder may not be assigned by any of the parties hereto without the
prior written consent of the other parties, except that the Buyer may
0105359.02-New York Server 3a 27 Draft September 29, 1995 - 7:03 pm
32
assign its rights and obligations hereunder to a designated wholly-owned
subsidiary at any time.
(b) This Agreement is not intended, nor shall it be construed, to confer
any rights or remedies under or by reason of this Agreement upon any Person
except (i) the parties hereto, (ii) the shareholders of Seller and Buyer and
(iii) their heirs, successors and permitted assigns.
6.2 EXHIBITS AND DISCLOSURE SCHEDULE. All Exhibits attached hereto and
the Disclosure Schedule referred to herein are hereby incorporated in and made
a part of this Agreement as if set forth in full herein.
6.3 ENTIRE AGREEMENT. This Agreement and the Other Documents, including
all Exhibits, documents, schedules, certificates and instruments referred to
herein or therein, embody the entire agreement and understanding of the parties
hereto in respect of the transactions contemplated by this Agreement. This
Agreement supersedes all prior agreements, arrangements and understandings of
the parties with respect to such transaction.
6.4 WAIVER OF COMPLIANCE. No amendment, modification, alteration,
supplement or waiver of compliance with any obligation, covenant, agreement,
provision or
0105359.02-New York Server 3a 28 Draft September 29, 1995 - 7:03 pm
33
condition hereof or consent pursuant to this Agreement shall be effective
unless evidenced by an instrument in writing executed by all of the parties
hereto, or, in the case of a waiver the party against whom enforcement of any
waiver is sought. Any waiver or failure to insist upon strict compliance with
such obligations, covenant, agreement, provision or condition shall not operate
as a waiver of, or estoppel with respect to, any subsequent or other failure.
6.5 ENFORCEABILITY. If any term, provision, covenant or restriction of
this Agreement or the application thereof to any person or circumstance should
be held by an administrative agency or court of competent jurisdiction to be
invalid, void, or unenforceable, then the remainder of this Agreement and the
application of such term, provision, covenant, or restriction to other persons
or circumstances shall not be affected thereby, but rather shall be enforced to
the greatest extent permitted by law. Further, it is the intent of the parties
that if any term, provision, covenant, or restriction of the Agreement should
be held to be invalid, void, or unenforceable as applied to any person or
circumstance, then such term, provision, covenant, or restriction shall be
modified to the minimum extent neces-
0105359.02-New York Server 3a 29 Draft September 29, 1995 - 7:03 pm
34
sary in order to render the same enforceable, consistent with the expressed
objectives of the parties hereto for entering into this Agreement.
6.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
6.7 HEADINGS. The table of contents, article and section headings
contained in this Agreement are for convenience only and shall not control or
affect in any way the meaning or interpretation of the provisions of this
Agreement.
6.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the state of New York without giving effect to the
conflicts of law principles thereof.
6.9 NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (i) at the time of delivery if personally delivered or telecopied
(with confirmation of receipt), (ii) the next day, if delivered by
nationally-recognized overnight express service, or (iii) in five (5) days, if
sent by registered
0105359.02-New York Server 3a 30 Draft September 29, 1995 - 7:03 pm
35
or certified mail (postage prepaid, return receipt requested) to the parties at
the following addresses:
(a) If to PhoneTel to:
PhoneTel Technologies, Inc.
000 Xxxxxxx Xxxxxx Xxxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Attn: Xxxxxx Xxxx
with copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Attn: N. J. Terris, Esq.
(b) if to PTC:
Public Telephone Corporation
Fort Xxxxx, Indiana
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Attn: President
with copy to:
Shareholder Representative/
Xxxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
0105359.02-New York Server 3a 31 Draft September 29, 1995 - 7:03 pm
36
with copy to:
Shambaugh, Kast, Xxxx & Xxxxxxxx
600 Standard Federal Plaza
P. O. Xxx 00000
Xxxx Xxxxx, Xxxxxxx 00000-0000
(000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq.
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be, deemed given only upon
receipt.
ARTICLE VII
DEFINITIONS
7.1 DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meanings set forth below (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"Buyer" shall mean PhoneTel II, Inc., an Ohio corporation and a
wholly-owned subsidiary of PhoneTel.
"Certificate of Merger" shall have the meaning set forth in Section 1.1
hereof.
"Closing" shall have the meaning set forth in Section 1.4 hereof.
"Closing Date" shall have the meaning set forth in Section 1.4 hereof.
0105359.02-New York Server 3a 32 Draft September 29, 1995 - 7:03 pm
37
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Disclosure Schedule" shall mean the disclosure schedule delivered in
connection herewith.
"Encumbrance" shall mean any lien, encumbrance, proxy, voting trust
arrangement, pledge, security interest, collateral security agreement,
financing statement (and similar notices) filed with any Governmental
Authority, claim (including any claim as defined in the Code), charge,
equities, mortgage, pledge, objection, title defect, option, restrictive
covenant or restriction on transfer of any nature whatsoever, and the interest
of the lessor in any property subject to a capital lease.
"GAAP" shall mean generally accepted accounting principles as in effect on
the date hereof.
"Governmental Authority" shall mean any government or political subdivision
thereof, whether federal, state, local or foreign, or any agency, department,
commission, board, bureau, court, tribunal, body, administrative or regulatory
authority or instrumentality of any such government or Political subdivision.
"Law" shall mean any law (including common law), rule, regulation,
restriction (including zoning), code, statute, ordinance, order, writ,
injunction, judg-
0105359.02-New York Server 3a 33 Draft September 29, 1995 - 7:03 pm
38
ment, decree or other requirement of a Governmental Authority.
"Losses" shall mean and include all demands, claims, actions, causes of
action, assessments, damages, losses, liabilities, judgments, settlements,
fines, penalties, sanctions, costs and expenses (including, without limitation,
interest, penalties, reasonable attorneys' fees and expenses as incurred, and
all other reasonable costs of investigating and defending third party claims as
incurred).
"Merger" shall have the meaning set forth in Section 1.1 hereof.
"Order" shall mean any order, judgment, injunction, award, decree, writ,
rule or similar action of any Governmental Authority.
"Other Documents" shall have the meaning set forth in Section 1.3 hereof.
"Permits" shall mean any franchise, license, certificate, approval,
number, registration, permit, authorization, order or approval of, and any
required registration with, any Governmental Authority.
"Person" shall mean any individual, partnership, firm, trust, association,
corporation, joint ven-
0105359.02-New York Server 3a 34 Draft September 29, 1995 - 7:03 pm
39
ture, joint stock company, unincorporated organization, Governmental Authority
or other entity.
"PhoneTel" shall mean PhoneTel Technologies, Inc., an Ohio corporation.
"PhoneTel Financial Statements" shall have the meaning set forth in Section
4.5 hereof.
"PTC" shall mean Public Telephone Corporation, an Indiana corporation.
"Securities Act" shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Seller" shall mean PTC.
"Seller Phones" shall mean the microprocessor-based pay telephones owned and
operated by Seller which are active and generating income.
"Seller Shares" shall mean the common shares, no par value, of Public
Telephone Corporation which are issued and outstanding as of the closing.
"Shares" shall mean the shares of Buyer's common stock, $.0l par value.
"Shareholders" shall have the meaning set forth in Section 1.2.
0105359.02-New York Server 3a 35 Draft September 29, 1995 - 7:03 pm
40
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
the day and year first above written.
Public Telephone Corporation
By:______________________________
Xxxxxx X. Xxxxxx, President
PhoneTel:
PHONETEL TECHNOLOGIES, INC.
By:______________________________
Name:
Title:
BUYER:
PHONETEL II, INC.
By:______________________________
Name:
Title:
0105359.02-New York Server 3a 36 Draft September 29, 1995 - 7:03 pm
41
16-Oct-95 EXHIBIT B
08:58 PM
-------------------------------------------------------------------------------------------------------------------------
# PTC PNTL SHARES PNTL SHARES
STOCKHOLDER SHARES % ISSUED ESCROWED
-------------------------------------------------------------------------------------------------------------------------
XXXXXX X. XXXXXX 184.0000 0.19048 223677 33332
XXXXX X. XXXXXX 114.0000 0.11801 138581 20652
-------------------------------------------------------------------------------------------------------------------------
XXXXXX X. XXXXXXX, XX. 14.0000 0.01449 17019 2536
XXXXXX X. XXXXX, M.D. 5.0000 0.00518 6078 906
DELAWARE CHARTER (X.X.XX.XXX) 55.0000 0.05694 66859 9964
-------------------------------------------------------------------------------------------------------------------------
XXXXX XXXXXXXX 1.0000 0.00104 1216 181
XXXXXXX X. XXXXXX 48.0000 0.04969 58350 0000
X. XXXXX XXXXXXX, M.D. - TRUST 20.0000 0.02070 24312 3623
-------------------------------------------------------------------------------------------------------------------------
XXXXXXX X. & XXXXXX XXXXX-TRUST 10.0000 0.01035 12156 1812
XXXXXXX X. XXXXX 5.0000 0.00518 6078 906
XXXX X. XXXXX 5.0000 0.00518 6078 906
-------------------------------------------------------------------------------------------------------------------------
XXXXXXXXX X. XXXXXXX, XX. 12.0000 0.01242 14587 2174
DANCO (G.R.N., M.D. XXX-FWNB) 50.0000 0.05176 60781 0000
X. XXXXX XXXXXXX, M.D. 10.0000 0.01035 12156 1812
-------------------------------------------------------------------------------------------------------------------------
XXXXXX X. XXXXX 20.0000 0.02070 24312 3623
XXXXXXX X. XXXXXX 55.0000 0.05694 66859 9964
XXXXXX X. XXXXXXXXX 70.0000 0.07246 85093 12681
-------------------------------------------------------------------------------------------------------------------------
XXXXX XXXXX (XXXXXXX-XXX) 50.0000 0.05176 60781 9058
XXXXXX X.XXXXXX XX. 78.0000 0.08075 94818 14130
XXXXXX X. XXXXXX-TRUSTEE 1.0000 0.00104 1216 181
-------------------------------------------------------------------------------------------------------------------------
XXXXXX X. XXXXXX 45.0000 0.04658 54703 8152
XXXXX X. XXXXXX 25.0000 0.02588 30391 4529
0.0000 0.0000 0.00000 0 0
-------------------------------------------------------------------------------------------------------------------------
SKBW PARTNERSHIP 12.0000 0.01242 14587 2174
DANCO (X. XXXXXXXXXXX-FWNB) 5.0000 0.00518 6078 906
XXXXXXX X. XXXXXXX XX. 28.0000 0.02899 34037 5072
-------------------------------------------------------------------------------------------------------------------------
XXXXX X. XXXXXXXXXXX 4.0000 0.00414 4862 725
XXXXXX X. XXXXXXXXXXX 10.0000 0.01035 12156 1812
XXXX X. XXXXXXXXXXX 25.0000 0.02588 30391 4529
-------------------------------------------------------------------------------------------------------------------------
DANCO (X. XXXXXXXXXXX-FWNB) 5.0000 0.00518 6078 906
0.0000 0.0000 0.00000 0 0
------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
966.0000 1.00000000 1174290 175000
-------------------------------------------------------------------------------------------------------------------------
NUMBER PTC SHARES 966
-------------------------------------------------------------------------------------------------------------------------
NUMPER PNTL SHARES ESCROWED 175000
NUMBER PNTL SHARES ISSUED 1174290
-------------
-------------------------------------------------------------------------------------------------------------------------
TOTAL PNTL SHARES 1349290
-------------------------------------------------------------------------------------------------------------------------
42
STOCKHOLDER REPRESENTATIONS AND WARRANTIES
------------------------------------------
This document is being delivered in connection with the proposed merger (the
"Merger") of PhoneTel II, Inc. ("Sub"), an Ohio corporation, and a wholly-owned
subsidiary of PhoneTel Technologies, Inc. ("PhoneTel"), an Ohio corporation,
with and into Public Telephone Corporation ("PTC"), pursuant to the Agreement
and Plan of Merger (the "Merger Agreement") to be entered into by and among
PTC, PhoneTel and Sub. As a result of the Merger, PTC will become a
wholly-owned subsidiary of PhoneTel. The undersigned holder (or holders, if
held jointly,) of shares of PTC Common Stock (the "Stockholder") understands
that, pursuant to the Merger, his/her shares of PTC Common Stock will be
converted into shares of PhoneTel Common Stock ("Shares").
NAME: ______________________________________________
(Please Type or Print)
NAME: ______________________________________________
(If Shares Are Held Jointly, Please Add
Additional Name)
ADDRESS: ____________________________________________
ADDRESS: ____________________________________________
SOCIAL SECURITY NUMBER: ___________________________
SOCIAL SECURITY NUMBER: ___________________________
NUMBER OF PTC SHARES HELD BY STOCKHOLDER: ___________
DATE: October _______, 1995
=======================================================
43
PART I: CERTIFICATION OF INVESTOR STATUS
Based upon the definition of "accredited investor" in Exhibit A hereto, please
certify that:
Stockholder is an "accredited investor".
Stockholder Initials:__________
PART II: KNOWLEDGE AND EXPERIENCE
KNOWLEDGEABLE INVESTORS REPRESENTATIONS AND WARRANTIES. The Stockholder
hereby represents and warrants that the Stockholder has such knowledge,
experience and skill in evaluating and investing in issues of both equity and
debt securities, including securities of new and speculative companies, such
that he/she is capable of evaluating the merits and risks of an investment in
the Shares, and has such knowledge, experience and skill in financial and
business matters that he/she is capable of evaluating the merits and risks of
the prospective investment in the Shares and the suitability of the Shares as
an investment.
Stockholder Initials:__________
PART III: ADDITIONAL REPRESENTATIONS AND WARRANTIES
(a) The Stockholder is acquiring the Shares solely for his/her own
beneficial account, for investment purposes, and not with a view to, or for
resale in connection with, any distribution of the Shares. The undersigned
understands that the Shares have not been registered under the Securities Act
of 1933 or the securities laws of any state by reason of specific exemptions
under the provisions thereof which depend in part upon the investment intent of
the undersigned and of the other representations made by the Stockholder. The
Stockholder understands that PhoneTel is relying upon the representations
contained herein for the purpose of determining whether the Acquisition meets
the requirements for such exemptions.
2
44
(b) The Stockholder has had an opportunity to ask questions, receive
answers and discuss the business, management and financial affairs of PhoneTel
and the terms and conditions of an investment in the Shares with, and has had
access to, the management of PhoneTel and the Stockholder has had the
opportunity to review the information received in connection with this
investment. The Stockholder is familiar with the business and financial
condition, properties, operations and prospects of PhoneTel and PTC and with
the terms of the Acquisition and the Merger Agreement.
(c) Neither PhoneTel nor any person acting on its behalf has offered the
Shares to the Stockholder by any form of general solicitation or general
advertising.
(d) (i) The Stockholder's financial situation is such that he/she can
afford to bear the economic risk of holding the Shares for an indefinite period
of time, has adequate means for providing for his/her current needs and
personal contingencies, and can afford to suffer the complete loss of his/her
investment in the Shares; (ii) in making his/her decision to acquire the Shares
pursuant to the Acquisition, the Stockholder has relied upon independent
investigations made by him/her and, to the extent believed by the Stockholder
to be appropriate, his/her representatives, including his/her own professional,
financial, tax and other advisors; and (iii) all information which the
Stockholder has provided to PhoneTel and its representatives including, without
limitation, information concerning the Stockholder and his/her financial
position is true, complete and correct as of the date hereof, and the
Stockholder agrees to promptly notify PhoneTel if at any time this ceases to be
the case.
(e) The Stockholder has good, valid and marketable title to, and legal
ownership of, the PTC Common Stock and, upon consummation of the Acquisition
the Stockholder will transfer to PhoneTel, and PhoneTel shall obtain, good,
valid and marketable record and beneficial ownership of all the PTC Common
Stock owned by the Stockholder, free and clear of any and all liens, options,
charges, restrictions (other than restrictions on transfer imposed by federal
or state securities laws) or encumbrances of any kind.
3
45
(f) The Stockholder has previously received the current and historical
financial statements of PhoneTel, and has had an opportunity to thoroughly
review such information before making any investment decision regarding the
shares.
(g) Each Stockholder represents that he does not have any plan or intention
to sell, exchange, transfer by gift or otherwise dispose of a number of
PhoneTel Common Shares to be received by such Stockholder pursuant to the
Merger that would reduce such Stockholder's ownership of PhoneTel Common Shares
to a number of shares having a value, as of the date of the Merger, of less
than 51 percent of the value of the PTC Common Stock held by such Stockholder
as of the same date.
Stockholder Initials: ____________
PART IV: ACQUISITION
The Stockholder hereby approves the Acquisition and the Merger Agreement, in
the form previously furnished to him/her, with such changes therein as the
officers of PTC executing the Merger Agreement shall approve, provided that no
such change shall affect the number or type of Shares to be issued in
consideration for shares of PTC Common Stock. The Stockholder has read,
understands and, in consideration of PhoneTel's agreement to enter into the
Merger Agreement, hereby agrees to be bound by, the provisions of Sections 5.2
and 5.4 of the Merger Agreement and the provisions of the Registration Rights
Agreement.
PART V: APPOINTMENT OF THE STOCKHOLDER REPRESENTATIVES
Each Stockholder hereby irrevocably appoints Xxxxxx X. Xxxxxx (the
"Stockholder Representative") as such Stockholder's attorney-in-fact and
representative, to do any and all things and to execute any and all documents
in such Stockholder's name, place and stead in connection with the Merger
Agreement and the transactions contemplated thereby, including, without
limitation, to accept on such Stockholder's behalf any amount payable to such
Stockholder under this Agreement, to give or receive, on such Stockholder's
behalf, any notice of instruction under the Merger Agreement, or to amend,
terminate or extend, or waive the terms of the Merger Agreement. The Buyer
shall be entitled to rely, as being binding upon
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46
such Stockholder, upon any document or other writing executed by the
Stockholder Representative, and the Buyer shall not be liable to any
Stockholder for any action taken or omitted to be taken by the Buyer in
reliance thereon.
IN WITNESS WHEREOF, the Stockholder has executed this document as of the
date set forth above.
__________________________
Stockholder
___________________________
(Additional Stockholder
Signature, If Held
Jointly)
Accepted and Agreed:
PHONETEL TECHNOLOGIES, INC.
By: _________________________
PHONETEL II, INC.
By: _________________________
Date: October 16, 1995.
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EXHIBIT A
---------
"Accredited investor" shall mean any person who comes within any of the
following categories, or who the issuer of the securities being offered or sold
reasonably believes comes within any of the following categories, at the time
of the sale of the securities to that person:
(1) Any natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of his purchase exceeds $1,000,000;
(2) Any natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that person's spouse
in excess of $300,000 in each of those years and has a reasonable expectation
of reaching the same income level in the current year;
(3) Any trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a person who has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of the
prospective investment; and
(4) Any entity in which all of the equity owners are accredited investors.
dls
P:\work\eeb\ptc\ptc0006s.agr
dls
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REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") made and
entered into this 16th day of October, l995, by and between PhoneTel
Technologies, Inc. ("PhoneTel"), an Ohio corporation, and Public Telephone
Corporation ("PTC"), an Indiana corporation.
WHEREAS, PhoneTel, PhoneTel II, Inc. ("Sub"), an Ohio
corporation, a wholly-owned subsidiary of PhoneTel and PTC are parties to the
Agreement and Plan of Merger of even date herewith (the "Merger Agreement")
pursuant to which PTC will merge with and into Sub (the "Merger") and the
shareholders of PTC will receive shares of PhoneTel common stock $.0l par value
("PhoneTel Common Shares").
WHEREAS, the shareholders of PTC have requested that, in
connection with the Merger Agreement, PhoneTel provide a means of registering
PhoneTel Common Shares under the Securities Act of 1933, as amended (the
"Securities Act"), and PhoneTel is willing to provide such registration as
provided herein;
NOW, THEREFORE, in consideration of the premises and the
agreements herein contained, the parties hereto agree as follows:
1. SHELF REGISTRATION. As promptly as practicable, PhoneTel
shall file and use all reasonable efforts to cause to be declared effective a
"shelf" registration statement (the "Shelf Registration Statement") on any
appropriate form pursuant to Rule 415 (or similar rule that may be adopted by
the Securities and Exchange Commission (the "SEC") under the Securities Act for
all the PhoneTel Common Shares (i) issued in connection with the Merger or (ii)
issued or distributed in respect of such PhoneTel Common Shares by way of stock
dividend or stock split or in connection with a combination of shares,
recapitalization, reorganization, merger, consolidation or otherwise
(collectively such PhoneTel Common Shares shall hereinafter be referred to as
the "Registrable Securities"), which form shall be available for the sale of
the Registrable Securities in accordance with the intended method or methods of
distribution thereof; PROVIDED, HOWEVER, that PhoneTel's obligations under this
49
Section 1 shall not commence until the later of (i) 90 days following the
closing of a public primary equity offering by PhoneTel or (ii) such later date
acceptable to the managing underwriter or underwriters, if any, of such
offering. PhoneTel agrees to use its best efforts to keep the Shelf
Registration Statement continuously effective and usable for resale of
Registrable Securities, for a period of twenty-four (24) months from the date
on which the SEC declares the Shelf Registration Statement effective or such
shorter period which will terminate when all the Registrable Securities covered
by the Shelf Registration Statement cease to be Registrable Securities (such
period shall hereinafter be referred to as the "Effective Period"); PROVIDED,
HOWEVER, that PhoneTel may elect that the Shelf Registration Statement not be
usable during any Blackout Period (as defined in Section 2 below).
2. BLACKOUT PERIOD. PhoneTel shall be entitled to elect that
the Shelf Registration Statement not be usable, for a reasonable period of
time, but not in excess of 90 days (a "Blackout Period"), if PhoneTel
determines in good faith that the use of the Shelf Registration Statement or
related prospectus) would interfere with any pending financing, acquisition,
corporate reorganization or any other corporate development involving PhoneTel
or any of its subsidiaries or would require premature disclosure thereof and
promptly gives the holders of Registrable Securities written notice of such
determination, containing a general statement of the reasons for such
postponement or restriction on use and an approximation of the anticipated
delay; PROVIDED, HOWEVER, that the aggregate number of days included in all
Blackout Periods during any consecutive 12 months during the Effective Period
shall not exceed 180 days.
3. PIGGYBACK REGISTRATIONS.
(a) RIGHT TO PIGGYBACK. Whenever PhoneTel proposes
to register any of its equity securities under the Securities Act (other than
the first registration after the date hereof) and the registration form to be
used may be used for the registration of Registrable Securities (a "Piggyback
Registration"), PhoneTel will give prompt written notice (in any event within
five business days after its receipt of notice of any exercise of
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50
other demand registration rights) to all holders of Registrable Securities of
its intention to effect such a registration and will, subject to paragraphs
(b), (c) and (d) below, include in such registration all Registrable Securities
with respect to which PhoneTel has received written requests for inclusion
therein within 15 days after the receipt of PhoneTel's notice.
(b) PRIORITY ON PRIMARY REGISTRATIONS. If a
Piggyback Registration is an underwritten primary registration on behalf of
PhoneTel (whether or not also on behalf of holders of PhoneTel's securities),
and the managing underwriters advise PhoneTel in writing that in their opinion
the number of securities requested to be included in such registration exceeds
the number which can be sold in such offering, PhoneTel will include in such
registration (i) first, the securities PhoneTel proposes to sell, (ii) second,
the Registrable Securities requested to be included in such registration, pro
rata among the holders of such Registrable Securities on the basis of the
number of shares then owned by such holders, and (iii) third, other securities
requested to be included in such registration.
(c) PRIORITY ON SECONDARY REGISTRATIONS. If a
Piggyback Registration is an underwritten secondary registration on behalf of
holders of PhoneTel's securities, and the managing underwriters advise PhoneTel
in writing that in their opinion the number of securities requested to be
included in such registration exceeds the number which can be sold in such
offering, PhoneTel will include in such registration (i) first, the securities
requested to be included therein by the holders demanding such registration,
(ii) second, the Registrable Securities requested to be included in such
registration, pro rata among such holders on the basis of the number of shares
then owned by each such holder and (iii) third, other securities requested to
be included in such registration.
(d) Nothing in this Section 3 will prohibit PhoneTel
from determining, at any time, not to file a registration statement or, if
filed,
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to withdraw such registration or terminate the registration related thereto.
4. SELECTION OF UNDERWRITERS. If any offering pursuant to a
Registration Statement is an underwritten offering, PhoneTel will select a
managing underwriter or underwriters to administer the offering.
5. REGISTRATION EXPENSES. PhoneTel will pay all of its
expenses in connection with the registration of Registrable Securities
(including registration and filing fees, printing costs, listing fees and the
fees and expenses of its counsel), and each holder shall pay all underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of such holder's Registrable Securities pursuant to any
registration statement filed pursuant to paragraph (a) or (b) above (a
"Registration Statement").
6. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY PHONETEL. PhoneTel agrees to
indemnify each holder of Registrable Securities, the underwriters
thereof, their respective officers and directors and each Person who
controls any of the foregoing (within the meaning of the Securities
Act), and any agent or investment adviser thereof against all losses,
claims, damages, liabilities and expenses (including reasonable
attorneys' fees and expenses of investigation) incurred by such party
pursuant to any actual or threatened action, suit, proceeding or
investigation arising out of or based upon (i) any untrue or alleged
untrue statement of material fact contained in the Registration
Statement, any prospectus or preliminary prospectus, or any amendment
or supplement to any of the foregoing or (ii) any omission or alleged
omission to state therein a material fact required to be stated
therein or necessary to make the statements therein (in the case of a
prospectus or a preliminary prospectus, in light of the circumstances
then existing) not misleading, except in each case insofar as the same
arise out of or are based upon, any such untrue statement or omission
made in reliance on and in conformity with information with respect to
such indemnified party furnished in writing to PhoneTel by such
indemnified
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party or its counsel expressly for use therein. Notwithstanding the
foregoing provisions of this paragraph (a), PhoneTel will not be
liable to any holder of Registrable Securities, any Person who
participates as an underwriter in the offering or sale of Registrable
Securities or any other Person, if any, who controls such holder or
underwriter (within the meaning of the Securities Act), under the
indemnity agreement in this paragraph (a) for any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or
expense that arises out of such holder's or other Person's failure to
send or give a copy of the final prospectus to the Person asserting an
untrue statement or alleged untrue statement or omission or alleged
omission at or prior to the written confirmation of the sale of the
Registrable Securities to such Person if such statement or omission
was corrected in such final prospectus and PhoneTel has previously
furnished copies thereof to such holder.
(b) Indemnification by Holders of Registrable
Securities. In connection with the Registration Statement, each
holder will furnish to PhoneTel in writing such information, including
with respect to the name, address and the amount of Registrable
Securities held by such holder, as PhoneTel reasonably requests for
use in such Registration Statement or the related prospectus and
agrees to indemnify and hold harmless PhoneTel, all other prospective
holders or any underwriter, as the case may be, and any of their
respective affiliates, directors, officers and controlling Persons
(within the meaning of the Securities Act) against any losses, claims,
damages, liabilities and expenses resulting from any untrue or alleged
untrue statement of a material fact or any omission or alleged
omission of a material fact required to be stated in such Registration
Statement or prospectus or any amendment or supplement to either of
them or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances then existing) not
misleading, but only to the extent that any such untrue statement or
omission is made in reliance on and in conformity with information
with respect to such holder furnished in writing to PhoneTel by such
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holder or its counsel specifically for inclusion therein.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person
entitled to indemnification hereunder agrees to give prompt written notice to
the indemnifying party after the receipt by such indemnified party of any
written notice of the commencement of any action, suit, proceeding or
investigation or threat thereof made in writing for which such indemnified
party may claim indemnification or contribution pursuant to this Agreement
(provided that failure to give such notification shall not affect the
obligations of the indemnifying person pursuant to this Section 6 except to the
extent the indemnifying party shall have been actually prejudiced as a result
of such failure). In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under these indemnification provisions for any
legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the defense
thereof other than reasonable costs of investigation, unless in the reasonable
judgment of any indemnified party a conflict of interest is likely to exist
between such indemnified party and any other of such indemnified parties with
respect to such claim, in which event the indemnifying party shall be obligated
to pay the reasonable fees and expenses of such additional counsel or counsels.
The indemnifying party will not be subject to any liability for any settlement
made without its consent (which will not be unreasonably withheld).
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(d) CONTRIBUTION. If the indemnification from the
indemnifying party provided for in this Section 6 is unavailable to the
indemnified party hereunder in respect of any losses, claims, damages,
liabilities or expenses referred to therein, then the indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages, liabilities and expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party and indemnified party in
connection with the actions which resulted in such losses, claims, damages,
liabilities and expenses, as well as any other relevant equitable
considerations. The relative fault of such indemnifying party and indemnified
party shall be determined by reference to, among other things, whether any
action in question, including any untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact, has
been made by, or relates to information supplied by, such indemnifying party or
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such action. The amount paid
or payable by a party as a result of the losses, claims, damages, liabilities
and expenses referred to above shall be deemed to include, subject to the
limitations set forth in paragraph (c) above, any legal and other fees and
expenses reasonably incurred by such indemnified party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 6 were determined by PRO
RATA allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 6, no
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Registrable Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such underwriter has otherwise been required to pay by reason
of such untrue or
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alleged untrue statement or omission or alleged omission, and no holder of
Registrable Securities shall be required to contribute any amount in excess of
the amount by which the total price at which the Registrable Securities of such
holder were offered to the public (net of all underwriting discounts and
commissions) exceeds the amount of any damages which such holder has otherwise
been required to pay by reason of such untrue statement or omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
If indemnification is available under this Section 6, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Section 6(a) or (b), as the case may be, without regard to the
relative fault of said indemnifying parties or indemnified party or any other
equitable consideration provided for in this paragraph (d).
7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. No holder of
Registrable Securities may participate in any underwritten offering hereunder
unless such holder (i) agrees to sell such holder's securities on the basis
provided in any underwriting arrangements approved by PhoneTel in its
reasonable discretion and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements.
8. RULE 144. For a period of three years following the date
hereof (or such shorter period as may permit the sale of Registrable Securities
under Rule 144 under the Securities Act without regard to the requirement of
"current public information"), PhoneTel covenants that it will file the reports
required to be filed by it under the Securities Act and the Securities Exchange
Act of 1934, as amended, and the rules and regulations adopted by the SEC
thereunder (or, if PhoneTel is not required to file such reports, it will, upon
the request of any holder of Registrable Securities, make publicly available
other information so long as necessary to permit sales under Rule 144 under the
Securities Act), and it will
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take such further action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder to
sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such Rule may be amended from time to time, or (ii) any
similar rule or regulation hereafter adopted by the SEC. Upon the request of
any holder of Registrable Securities, PhoneTel will deliver to such holder a
written statement as to whether it has complied with such requirements.
9. REMEDIES. Each holder of Registrable Securities in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement.
10. PARTIES IN INTEREST; NO THIRD PARTY BENEFICIARIES.
(a) This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the parties hereto and their respective
successors and permitted assigns. This Agreement and the rights and
obligations of PTC, PhoneTel and the shareholders of PTC hereunder may not be
assigned by any of the parties hereto without the prior written consent of the
other parties.
(b) This Agreement is not intended, nor shall it be
construed, to confer any rights or remedies under or by reason of this
Agreement upon any person except the parties hereto, the shareholders of PTC
and their heirs, successors and permitted assigns.
11. ENTIRE AGREEMENT. This Agreement embodies the entire
agreement and understanding of the parties hereto in respect of the subject
matter hereof. This Agreement supersedes all prior agreements, arrangements
and understandings of the parties with respect to such subject matter.
12. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
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13. HEADINGS. The section headings contained in this
Agreement arte for convenience only and shall not control or affect in any way
the meaning or interpretation of the provisions of this Agreement.
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Missouri without giving
effect to the conflicts of law principles of such jurisdiction.
15. NOTICES. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be deemed to have
been duly given at the time of delivery if personally delivered or telecopied
(with confirmation of receipt), the next day, if delivered by
nationally-recognized overnight express service, or five (5) days, if sent by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses:
(a) If to PhoneTel to:
PhoneTel Technologies, Inc.
000 Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Attn: Xxxxxx Xxxx
with copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Attn: N.J. Terris, Esq.
(b) If to PTC:
Xxxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxx Xxxxx, XX 00000
(000) 000-0000
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with copy to:
Shambaugh, Kast, Xxxx & Xxxxxxxx
600 Standard Federal Plaza
P. O. Xxx 00000
Xxxx Xxxxx, XX 00000-0000
(000) 000-0000
Attention: Xxxxxx X. Xxxx
or to such other address as the person to whom notice is to be given may have
previously furnished to the other in writing in the manner set forth above,
provided that notice of a change of address shall be deemed given only upon
receipt.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, on the day and year first above written.
PUBLIC TELEPHONE CORPORATION
By: __________________________
Xxxxxx X. Xxxxxx, President
PHONETEL TECHNOLOGIES, INC.
By: __________________________
Name:
Title:
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ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT is made and entered into as of October
16, 1995 ("Escrow Agreement") by and among SHAMBAUGH, KAST, XXXX & XXXXXXXX, an
Indiana partnership, (the "Escrow Agent"), PUBLIC TELEPHONE CORPORATION, an
Indiana corporation, (the "Seller"), and PHONETEL TECHNOLOGIES, INC., an Ohio
corporation ("PhoneTel"). Capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in the Merger Agreement.
WHEREAS, PhoneTel, PhoneTel II, Inc. ("Sub"), an Ohio
corporation and a wholly-owned subsidiary of PhoneTel, and the Seller are
parties to an Agreement and Plan of Merger, dated as of the date hereof (the
"Merger Agreement"), pursuant to which the Seller will merge with and into a
subsidiary of PhoneTel;
WHEREAS, pursuant to Section 1.3 of the Merger Agreement, the
Seller and PhoneTel wish to deposit into escrow 175,000 shares of PhoneTel
common stock (the "Escrow Amount") being delivered to the Escrow Agent upon the
signing of the Merger Agreement;
WHEREAS, the Seller and PhoneTel wish to enter into this
Escrow Agreement providing for the terms and conditions upon which the Escrow
Amount will be held and released by the Escrow Agent, and the Escrow Agent
wishes to act as escrow agent pursuant to the terms and conditions of this
Escrow Agreement.
NOW, THEREFORE, in consideration of the premises and intending
to be legally bound hereby, the parties hereto agree as follows:
SECTION 1. DEPOSIT INTO ESCROW ACCOUNT. On the date of this
Agreement, PhoneTel is depositing the 175,000 shares of PhoneTel common stock
comprising the Escrow Amount into an escrow account established with the Escrow
Agent and entitled "PhoneTel Escrow Account" (the "Escrow Account").
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SECTION 2. PURPOSE OF ESCROW. The Escrow Amount shall be
held by Escrow Agreement for the purpose of effecting any necessary adjustment
in the number of shares of PhoneTel common stock to be distributed to the
Seller's shareholders as consideration for the merger, as provided in Section
1.2 of the Merger Agreement. Each share of PhoneTel common stock comprising
the Escrow Amount shall be valued at $1.00 for purposes of any adjustment to be
made pursuant to such Section 1.2 of the Merger Agreement.
SECTION 3. REINVESTMENT AND EARNINGS. The Escrow Agent is
hereby authorized to receive, in its capacity as Escrow Agent and on behalf of
the other parties hereto, all dividends, earnings, options, and splits to which
the shares which comprise the Escrow Amount would be entitled.
SECTION 4. ESCROW AND ESCROW DELIVERY. The Escrow Agent
shall hold the Escrow Amount until such time or times as the Escrow Agent
receives written instruction from the Shareholder Representative and PhoneTel
to deliver all or any part of the Escrow Amount to the Shareholder
Representative or to PhoneTel, as specified in the written instruction. Upon
receipt of the foregoing instructions, the Escrow Agent shall deliver the
Escrow Amount, or such portion thereof as specified in such instructions,
accordingly. In accordance with Section _____ of the Merger Agreement, it is
contemplated that 125,000 shares will be distributed ninety (90) days from the
date hereof and the remaining 50,000 shares will be distributed one (1) year
from the date hereof; PROVIDED, however, that if notice of a claim or dispute
regarding distribution of the Escrow Amount has been given prior to such dates,
delivery of such amounts shall be deferred until such time as all claims or
disputes have been settled between the parties and Escrow Agent has been
provided with written instructions from both parties. All deliveries to the
Seller pursuant to the foregoing instructions shall be deemed to have occurred
when such Shares are distributed by the Escrow Agent to the Shareholder
Representative, as hereinafter defined, for distribution among the Shareholders
of Seller in accordance with their respective interests. During the time that
the Escrow Amount is held by the Escrow Agent and until such delivery by the
Escrow Agent, the Seller and PhoneTel understand and agree that neither shall
be enti-
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62
tled to the Escrow Amount and that the Escrow Amount shall not be subject to
any lien, security interest or encumbrance of any kind placed thereon by either
of them.
SECTION 5. TERMINATION. This Escrow Agreement shall
terminate upon the distribution of the entire Escrow Amount held by the Escrow
Agent pursuant to this Agreement.
SECTION 6. SHAREHOLDER REPRESENTATIVE. As used herein, the
term "Shareholder Representative" shall refer to Xxxxxx X. Xxxxxx. All
actions required or permitted to be taken by the Seller hereunder shall be done
and performed by the Shareholder Representative for and on behalf of the Seller
and each holder, as of the date hereof, of the common stock, no par value, of
Seller the (each, individually, a "Shareholder" and, together, the
"Shareholders"). The Escrow Agent shall be entitled to rely, as being binding
upon Seller and each of the Shareholders, upon any document or other writing
executed by the Shareholder Representative, and the Escrow Agent shall not be
liable to Seller or any Shareholder for any action taken or omitted to be taken
by the Shareholder Representative in reliance thereon. The Seller hereby
represents that each Shareholder has duly appointed the Shareholder
Representative as its lawful attorney-in-fact, with powers to consummate all
transactions contemplated hereby on each Shareholder's behalf.
SECTION 7. THIRD PARTY BENEFICIARIES. The provisions of this
Agreement shall inure to the benefit of and shall be enforceable by each
Shareholder and each shall be deemed to be a third party beneficiary hereunder.
SECTION 8. INDEMNIFICATION. The Seller and PhoneTel agree to
hold the Escrow Agent harmless and indemnify it from any loss or claim
whatsoever arising in conjunction with the performance of the duties of the
Escrow Agent, but only to the extent that the Escrow Agent has fully complied
with the provisions of this Escrow Agreement. Said indemnification shall
survive the termination of this Agreement.
SECTION 9. NOTICES. Any notices or other communications
required or permitted hereunder shall be given in writing and shall be
delivered by hand or air
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63
courier or sent by certified or registered mail, postage prepaid, addressed as
follows:
If to PhoneTel, to:
PHONETEL TECHNOLOGIES, INC.
000 Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: President/CEO
Copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: N.J. Terris, Esq.
or:
If to the Seller, to:
XXXXXX X. XXXXXX
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
or:
If to the Escrow Agent, to:
SHAMBAUGH, KAST, XXXX & XXXXXXXX
600 Standard Federal Plaza
P. O. Xxx 00000
Xxxx Xxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxx
or to such other address as shall be furnished in writing by such party, and
any such notice or communication shall be effective and be deemed to have been
given as of (i) the date delivered, if sent by hand, (ii) the following day, if
sent by overnight courier or (iii) five days after the date of mailing, if sent
by regular mail.
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SECTION 10. ENTIRE AGREEMENT. This Escrow Agreement is the
entire agreement among the parties with respect to the subject matter hereof
and supersedes all prior agreements, written or oral, with respect thereto.
SECTION 11. AMENDMENTS; WAIVER. This Escrow Agreement may be
amended, modified, superseded, cancelled, renewed or extended, and the terms
and conditions hereof waived, only by written instrument signed by the parties
hereto or, in the case of a waiver, the party waiving compliance.
SECTION 12. ASSIGNMENT. No assignment of any rights or
delegation of any obligations provided for herein may be made by any party
without the express written consent of all the other parties hereto.
SECTION 13. COUNTERPARTS. This Escrow Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same instrument.
SECTION 14. GOVERNING LAW. This Agreement shall be construed
in accordance with and governed by the internal laws of the State of Indiana.
SECTION 15. BENEFIT. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and the personal
representatives, executors, administrators, successors and assigns of each of
them.
0102259.03-New York Server 3a 5 Draft September 5, 1995 - 5:32 pm
65
IN WITNESS WHEREOF, the parties hereto have affixed their
signatures to this Escrow Agreement upon the date first set forth above.
PUBLIC TELEPHONE CORPORATION
By: ______________________________
XXXXXX X. XXXXXX, President
PHONETEL TECHNOLOGIES, INC.
By: ________________________
Name: ______________________
Title: _____________________
SHAMBAUGH, KAST, XXXX & XXXXXXXX
By: ___________________________
Xxxxxx X. Xxxx
dls
P:\work\eeb\ptc\ptc0005s.agr
0102259.03-New York Server 3a 6 Draft September 5, 1995 - 5:32 pm
66
NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT (this "Agreement"), dated as of October 16,
1995, between PhoneTel Technologies, Inc., an Ohio corporation ("PhoneTel"),
PhoneTel II, Inc., an Ohio corporation and wholly owned subsidiary of PhoneTel
("Sub"), and Xxxxxx X. Xxxxxx ("Xxxxxx").
W I T N E S S E T H:
WHEREAS, Xxxxxx has heretofore served as President, Chairman and CEO of
Public Telephone Corporation, an Indiana Corporation ("Public");
WHEREAS, PhoneTel, Sub and Public have entered into an Agreement and
Plan of Merger (the "Merger Agreement"), dated as of the date hereof, pursuant
to which, at the "Closing Date" (as such term is defined in the Merger
Agreement), Sub will be merged with and into Public;
WHEREAS, Public and PhoneTel are in the business of owning, leasing,
operating and maintaining pay telephones;
WHEREAS, PhoneTel recognizes that Xxxxxx possesses trade secrets and
confidential business information relating to Public as well as knowledge and
experience relating to the pay telephone industry and desires to prevent Xxxxxx
xxxx (1) competing with the business operated by PhoneTel (or any subsidiary
thereof) or (2) soliciting the former, current or future customers or employees
of Public or PhoneTel (or any subsidiary thereof);
WHEREAS, in connection with the transactions contemplated in the Merger
Agreement, Xxxxxx will receive shares of PhoneTel common stock, $.01 par value
("PhoneTel Common Stock"), in exchange for his shares of Public common stock,
no par value ("Public Common Stock"); and
WHEREAS, Xxxxxx is agreeable to restrictions on his ability to compete
against and solicit from PhoneTel in accordance with the terms of this
Agreement.
67
NOW, THEREFORE, in consideration of the execution, delivery and
performance of the Merger Agreement, and mutual premises and covenants herein
and therein contained and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, PhoneTel and Xxxxxx hereby
agree as follows:
1. TERM. The term of this agreement shall commence at the Closing
Date and continue for a period of five (5) years thereafter (the "Term").
2. NON-COMPETITION. (a) For a period of two years commencing at the
Closing Date, Xxxxxx shall not, without the prior written consent of PhoneTel,
directly or indirectly, own, operate, manage, be employed by, be an agent of,
act as a consultant for, advise, financially support, lease property to or
from, have a proprietary interest in or support in any other way, any
enterprise or business which sells, leases, maintains, owns or operates pay
telephones in any part of the United States of America in which PhoneTel is
conducting or will conduct its pay telephone business. Xxxxxx acknowledges
that the business of PhoneTel will be conducted on a national basis and agrees
that such geographic scope is reasonable.
(b) Notwithstanding any provision to the contrary contained
herein, Xxxxxx shall not be prohibited from owning less than 2% of the
outstanding equity securities of any publicly-held corporation.
3. NON-SOLICITATION. Xxxxxx agrees that, during the Term of this
agreement, he will not, directly or indirectly, (i) solicit, entice or
persuade, or attempt to solicit, entice or persuade, any employee of PhoneTel
or its affiliates, or any client then under contract with PhoneTel or any of
its affiliates to terminate his employment by or contractual relationship with
PhoneTel or its affiliates or to become employed by or to enter into
contractual relations with a competitor of PhoneTel or its affiliates or (ii)
persuade or attempt to persuade customers, potential customers, suppliers or
potential suppliers of PhoneTel and its affiliates to divert their business to
any other entity or individual.
4. CONFIDENTIALITY. Xxxxxx acknowledges that Public and PhoneTel
would be irreparably damaged if
68
confidential information about Public were disclosed to or utilized on behalf
of any person, firm, corporation or other business organization which is in
competition in any respect with Public or PhoneTel. Xxxxxx covenants and
agrees that he will not at any time, and will cause his agents, affiliates and
associates not to at any time, without the prior written consent of PhoneTel,
disclose any such confidential information, except to employees and authorized
representatives of PhoneTel.
5. COMPENSATION; TAXES. In consideration for the agreements of Xxxxxx
contained herein, PhoneTel agrees to pay Xxxxxx a total of $129,239.50, $27,500
of which shall be payable in cash upon the Closing (as defined in the Merger
Agreement) and the other $101,739.50 of which shall be payable in the form of a
note (the "Note"), the terms of which shall govern the payment of such amount.
A copy of the Note is attached hereto as Exhibit 1. In addition, and in
further consideration for the agreements of Xxxxxx contained herein, PhoneTel
agrees to pay Xxxxxx 275,000 shares of PhoneTel Common Stock, payable six
months from the date hereof.
Xxxxxx hereby acknowledges that by virtue of this Agreement he is not
and will not become an employee of PhoneTel. Xxxxxx further acknowledges his
separate responsibility for all federal and state withholding taxes, Federal
Insurance Contribution Act taxes and workers' compensation and unemployment
compensation taxes, if applicable, and agrees to indemnify and hold the Company
harmless from any claim or liability therefor.
6. NECESSITY. Xxxxxx acknowledges that due to the uniqueness of his
skills and abilities and the uniqueness of the trade secrets, confidential
business lists, customer requirements and preferences, records and information
he possesses, the covenants set forth herein are reasonable and necessary for
the protection of PhoneTel. Xxxxxx further acknowledges that enforcement of
the covenants herein will not deprive him of his ability to earn a livelihood.
7. SPECIFIC PERFORMANCE. Xxxxxx acknowledges that the rights and
privileges granted to PhoneTel herein are of a special and unique character,
which gives them a peculiar value, the loss of which may not be reasonably
3
69
or adequately compensated for by damages in an action at law, and that a breach
by Xxxxxx of this Agreement will cause PhoneTel irreparable injury and damage.
Accordingly, Xxxxxx hereby agrees that PhoneTel shall be entitled to remedies
of injunction, specific performance or other equitable relief, to prevent or
cure a breach of this Agreement. This provision shall not be construed as a
waiver of any other rights or remedies PhoneTel may have for damages or
otherwise.
8. PARTIAL INVALIDITY. The parties have entered into this Agreement
in good faith and for the reasons set forth in the recitals hereto and assume
and intend that this Agreement is legally binding. If, for any reason, this
Agreement is not binding because of its geographical scope or because of its
term, then the parties agree that this Agreement shall be deemed effective for
the widest geographical area and/or the longest period of time as may be
legally enforceable, it being understood that the compensation payable
hereunder is for the full Term and geographic area stated herein, and for all
the covenants of Xxxxxx. Any provision of this Agreement which is determined
to be invalid or unenforceable shall be ineffective only to the extent of such
invalidity or unenforceability without affecting the validity or enforceability
of any other provisions hereof. The provisions of this Section 8 shall not be
construed as a waiver of any other rights or remedies PhoneTel may have for
damages or otherwise.
9. BINDING EFFECT; MODIFICATIONS. This Agreement shall be binding
upon and shall inure to the benefit of the personal representatives, executors,
administrators, successors and assigns of the parties to this Agreement. This
Agreement contains the entire agreement of the parties and supersedes any and
all prior written agreements between the parties, and all prior and
contemporaneous oral statements with respect to the transactions contemplated
hereby. This Agreement may not be changed or terminated orally, but may only
be changed by an agreement in writing signed by each of the parties hereto.
10. SECTION CAPTIONS; COUNTERPARTS. Section and other captions
contained in this Agreement are for reference purposes only and are in no way
intended to describe, interpret, define or limit the scope, extent or
4
70
intent of this Agreement or any provision hereof. This Agreement may be
executed in counterparts, each of which, when so executed, shall be deemed to
be an original, and such counterparts shall, together, constitute and be one
and the same instrument.
11. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of New York, applied without giving effect to any
conflict of laws principles.
12. NO RULE OF CONSTRUCTION. The parties acknowledge and agree that
no rule of construction shall apply to this Agreement which construes any
language, whether ambiguous, unclear or otherwise, in favor of or against any
party by reason of that party's role in drafting this Agreement.
13. NOTICES. For the purposes of this Agreement, notices, demands
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to PhoneTel or PhoneTel II:
PhoneTel Technologies, Inc.
000 Xxxxxxx Xxxxxx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: President
Telephone: (000) 000-0000
If to Xxxxxx:
Xxxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
or to such other address as each party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
5
71
IN WITNESS WHEREOF, the undersigned parties have hereunto set their
hands as of the day and year first above written.
PHONETEL TECHNOLOGIES, INC.
By: _________________________
Name:
Title:
PHONETEL II, INC.
By: ___________________________
Name:
Title:
_______________________________
XXXXXX XXXXXX
72
NON-COMPETITION AGREEMENT
NON-COMPETITION AGREEMENT (this "Agreement"), dated as of October 16,
1995, between PhoneTel Technologies, Inc., an Ohio corporation ("PhoneTel"),
PhoneTel II, Inc., an Ohio corporation and wholly owned subsidiary of PhoneTel
("Sub"), and Xxxxx X. Xxxxxx ("Xxxxxx").
W I T N E S S E T H:
WHEREAS, Xxxxxx has heretofore served as Executive Vice President and
CFO of Public Telephone Corporation, an Indiana Corporation ("Public");
WHEREAS, PhoneTel, Sub and Public have entered into an Agreement and
Plan of Merger (the "Merger Agreement"), dated as of the date hereof, pursuant
to which, at the "Closing Date" (as such term is defined in the Merger
Agreement), Sub will be merged with and into Public;
WHEREAS, Public and PhoneTel are in the business of owning, leasing,
operating and maintaining pay telephones;
WHEREAS, PhoneTel recognizes that Xxxxxx possesses trade secrets and
confidential business information relating to Public as well as knowledge and
experience relating to the pay telephone industry and desires to prevent Xxxxxx
xxxx (1) competing with the business operated by PhoneTel (or any subsidiary
thereof) or (2) soliciting the former, current or future customers or employees
of Public or PhoneTel (or any subsidiary thereof);
WHEREAS, in connection with the transactions contemplated in the Merger
Agreement, Xxxxxx will receive shares of PhoneTel common stock, $.01 par value
("PhoneTel Common Stock"), in exchange for his shares of Public common stock,
no par value ("Public Common Stock"); and
WHEREAS, Xxxxxx is agreeable to restrictions on his ability to compete
against and solicit from PhoneTel in accordance with the terms of this
Agreement.
73
NOW, THEREFORE, in consideration of the execution, delivery and
performance of the Merger Agreement, and mutual premises and covenants herein
and therein contained and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, PhoneTel and Xxxxxx hereby
agree as follows:
1. TERM. The term of this agreement shall commence at the Closing
Date and continue for a period of five (5) years thereafter (the "Term").
2. NON-COMPETITION. (a) For a period of two years commencing at the
Closing Date, Xxxxxx shall not, without the prior written consent of PhoneTel,
directly or indirectly, own, operate, manage, be employed by, be an agent of,
act as a consultant for, advise, financially support, lease property to or
from, have a proprietary interest in or support in any other way, any
enterprise or business which sells, leases, maintains, owns or operates pay
telephones in any part of the United States of America in which PhoneTel is
conducting or will conduct its pay telephone business. Xxxxxx acknowledges
that the business of PhoneTel will be conducted on a national basis and agrees
that such geographic scope is reasonable.
(b) Notwithstanding any provision to the contrary contained herein,
Xxxxxx shall not be prohibited from (i) leasing, owning or operating pay
telephones on real property of which he is the sole owner or which is owned by
any corporation of which Xxxxxx or his spouse collectively own at least 51% of
the outstanding shares, (ii) owning less than 2% of the outstanding equity
securities of any publicly-held corporation or (iii) being employed by or
participating on pay telephone industry commissions and associations,
including, but not limited to, Michigan Public Telecommunication Association,
Illinois Public Telecommunication Association and IPTA, L.L.C.
3. NON-SOLICITATION. Xxxxxx agrees that, during the Term of this
agreement, he will not, directly or indirectly, (i) solicit, entice or
persuade, or attempt to solicit, entice or persuade, any employee of PhoneTel
or its affiliates, or any client then under contract with PhoneTel or any of
its affiliates to terminate his employment by or contractual relationship with
74
PhoneTel or its affiliates or to become employed by or to enter into
contractual relations with a competitor of PhoneTel or its affiliates or (ii)
persuade or attempt to persuade customers, potential customers, suppliers or
potential suppliers of PhoneTel and its affiliates to divert their business to
any other entity or individual.
4. CONFIDENTIALITY. Xxxxxx acknowledges that Public and PhoneTel
would be irreparably damaged if confidential information about Public were
disclosed to or utilized on behalf of any person, firm, corporation or other
business organization which is in competition in any respect with Public or
PhoneTel. Xxxxxx covenants and agrees that he will not at any time, and will
cause his agents, affiliates and associates not to at any time, without the
prior written consent of PhoneTel, disclose any such confidential information,
except to employees and authorized representatives of PhoneTel.
5. COMPENSATION; TAXES. In consideration for the agreements of Xxxxxx
contained herein, PhoneTel agrees to pay Xxxxxx a total of $129,239.50, $27,500
of which shall be payable in cash upon the Closing (as defined in the Merger
Agreement) and the other $101,739.50 of which shall be payable in the form of a
note (the "Note"), the terms of which shall govern the payment of such amount.
A copy of the Note is attached hereto as Exhibit 1. In addition, and in
further consideration for the agreements of Xxxxxx contained herein, PhoneTel
agrees to pay Xxxxxx 205,000 shares of PhoneTel Common Stock, payable six
months from the date hereof.
Xxxxxx hereby acknowledges that by virtue of this Agreement he is not
and will not become an employee of PhoneTel. Xxxxxx further acknowledges his
separate responsibility for all federal and state withholding taxes, Federal
Insurance Contribution Act taxes and workers' compensation and unemployment
compensation taxes, if applicable, and agrees to indemnify and hold the Company
harmless from any claim or liability therefor.
6. NECESSITY. Xxxxxx acknowledges that due to the uniqueness of his
skills and abilities and the uniqueness of the trade secrets, confidential
business lists, customer requirements and preferences, records and information
he possesses, the covenants set forth herein
3
75
are reasonable and necessary for the protection of PhoneTel. Xxxxxx further
acknowledges that enforcement of the covenants herein will not deprive him of
his ability to earn a livelihood.
7. SPECIFIC PERFORMANCE. Xxxxxx acknowledges that the rights and
privileges granted to PhoneTel herein are of a special and unique character,
which gives them a peculiar value, the loss of which may not be reasonably or
adequately compensated for by damages in an action at law, and that a breach by
Xxxxxx of this Agreement will cause PhoneTel irreparable injury and damage.
Accordingly, Xxxxxx hereby agrees that PhoneTel shall be entitled to remedies
of injunction, specific performance or other equitable relief, to prevent or
cure a breach of this Agreement. This provision shall not be construed as a
waiver of any other rights or remedies PhoneTel may have for damages or
otherwise.
8. PARTIAL INVALIDITY. The parties have entered into this Agreement
in good faith and for the reasons set forth in the recitals hereto and assume
and intend that this Agreement is legally binding. If, for any reason, this
Agreement is not binding because of its geographical scope or because of its
term, then the parties agree that this Agreement shall be deemed effective for
the widest geographical area and/or the longest period of time as may be
legally enforceable, it being understood that the compensation payable
hereunder is for the full Term and geographic area stated herein, and for all
the covenants of Xxxxxx. Any provision of this Agreement which is determined
to be invalid or unenforceable shall be ineffective only to the extent of such
invalidity or unenforceability without affecting the validity or enforceability
of any other provisions hereof. The provisions of this Section 8 shall not be
construed as a waiver of any other rights or remedies PhoneTel may have for
damages or otherwise.
9. BINDING EFFECT; MODIFICATIONS. This Agreement shall be binding
upon and shall inure to the benefit of the personal representatives, executors,
administrators, successors and assigns of the parties to this Agreement. This
Agreement contains the entire agreement of the parties and supersedes any and
all prior written agreements between the parties, and all prior and
contemporaneous oral statements with respect to the
4
76
transactions contemplated hereby. This Agreement may not be changed or
terminated orally, but may only be changed by an agreement in writing signed by
each of the parties hereto.
10. SECTION CAPTIONS; COUNTERPARTS. Section and other captions
contained in this Agreement are for reference purposes only and are in no way
intended to describe, interpret, define or limit the scope, extent or intent of
this Agreement or any provision hereof. This Agreement may be executed in
counterparts, each of which, when so executed, shall be deemed to be an
original, and such counterparts shall, together, constitute and be one and the
same instrument.
11. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of New York, applied without giving effect to any
conflict of laws principles.
12. NO RULE OF CONSTRUCTION. The parties acknowledge and agree that
no rule of construction shall apply to this Agreement which construes any
language, whether ambiguous, unclear or otherwise, in favor of or against any
party by reason of that party's role in drafting this Agreement.
13. NOTICES. For the purposes of this Agreement, notices, demands
and all other communications provided for in this Agreement shall be in writing
and shall be deemed to have been duly given when delivered or (unless otherwise
specified) mailed by United States certified or registered mail, return receipt
requested, postage prepaid, addressed as follows:
If to PhoneTel or PhoneTel II:
PhoneTel Technologies, Inc.
000 Xxxxxxx Xxxxxx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: President
Telephone: (000) 000-0000
5
77
If to Xxxxxx:
Xxxxx X. Xxxxxx
0000 Xxxxx Xxxxx, Xxx. #0
Xxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
or to such other address as each party may have furnished to the others in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
6
78
IN WITNESS WHEREOF, the undersigned parties have hereunto set their
hands as of the day and year first above written.
PHONETEL TECHNOLOGIES, INC.
By: _________________________
Name:
Title:
PHONETEL II, INC.
By: ___________________________
Name:
Title:
_______________________________
XXXXX XXXXXX
