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Exhibit (c)(1)
TABLE OF CONTENTS
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AGREEMENT AND PLAN OF MERGER
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ARTICLE I - DEFINITIONS ........................................ 1
1.1 DEFINITIONS .......................................... 1
ARTICLE II - TERMS OF MERGER; THE CLOSING ....................... 5
2.1 MERGER................................................ 5
2.2 EXCHANGE OF CONSIDERATION............................. 6
2.3 CLOSING............................................... 6
2.4 DELIVERIES BY WCI..................................... 7
2.5 DELIVERIES BY BUYER AND PHONETEL...................... 7
2.6 RELATED MATTERS....................................... 8
(a) EMPLOYMENT AGREEMENTS............................ 8
(b) SECURITY AGREEMENT............................... 8
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF WCI.............. 8
3.1 ORGANIZATION AND STANDING; SUBSIDIARIES............... 8
3.2 ORGANIZATIONAL DOCUMENTS AND CORPORATE RECORDS....... 10
3.3 AUTHORIZATION........................................ 11
3.4 WCI CAPITALIZATION................................... 11
3.5 CONSENTS AND APPROVALS; NO VIOLATION................. 12
3.6 ABSENCE OF UNDISCLOSED LIABILITIES................... 13
3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS................. 13
3.8 COMPLIANCE WITH LAWS AND PERMITS..................... 14
3.9 LITIGATION AND ARBITRATION........................... 15
3.10 BROKERS............................................. 16
3.11 WCI PHONES.......................................... 16
3.12 TELCO CHARGES AND LOCATION COMMISSION............... 16
3.13 DISCLOSURE.......................................... 16
ARTICLE IV - REPRESENTATIONS AND WARRANTIES
OF BUYER AND PHONETEL........................................... 17
4.1 ORGANIZATION AND STANDING; SUBSIDIARIES.............. 17
4.2 AUTHORIZATION........................................ 18
4.3 CAPITALIZATION....................................... 18
4.4 CONSENTS AND APPROVALS; NO VIOLATION................. 20
4.5 ABSENCE OF UNDISCLOSED LIABILITIES................... 21
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS................. 21
4.7 COMPLIANCE WITH LAWS AND PERMITS..................... 22
4.8 LITIGATION AND ARBITRATION........................... 23
4.9 BROKERS.............................................. 24
4.10 PHONETEL PHONES..................................... 24
4.11 TELCO CHARGES AND LOCATION COMMISSIONS.............. 24
4.12 DISCLOSURE.......................................... 24
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ARTICLE V - FURTHER ASSURANCES; COOPERATION..................... 25
5.1 FURTHER ASSURANCES; COOPERATION...................... 25
5.2 EXPENSES............................................. 25
5.3 REPAYMENT OF LOANS TO SHAREHOLDERS OF WCI............ 26
5.4 REGISTRATION RIGHTS AGREEMENT........................ 26
ARTICLE VI - SURVIVAL OF REPRESENTATIONS AND WARRANTIES......... 26
6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES........... 26
6.2 INDEMNIFICATION OF PHONETEL AND BUYER................ 27
6.3 INDEMNIFICATION OF WCI SHAREHOLDERS.................. 27
6.4 ASSERTION OF CLAIMS.................................. 27
ARTICLE VII - MISCELLANEOUS..................................... 28
7.1 PARTIES IN INTEREST; NO THIRD PARTY BENEFICIARIES.... 28
7.2 EXHIBITS AND DISCLOSURE SCHEDULE..................... 29
7.3 ENTIRE AGREEMENT..................................... 29
7.4 WAIVER OF COMPLIANCE................................. 29
7.5 ENFORCEABILITY....................................... 30
7.6 COUNTERPARTS......................................... 30
7.7 HEADINGS............................................. 30
7.8 GOVERNING LAW........................................ 30
7.9 NOTICES.............................................. 31
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AGREEMENT AND PLAN OF MERGER
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This Agreement and Plan of Merger (the "Agreement") dated
September 22, 1995, by and among PhoneTel Technologies, Inc.
("PhoneTel"), an Ohio corporation, PhoneTel, II, Inc. ("Buyer"), a
Missouri corporation, and World Communications, Inc. (together with
all subsidiaries thereof "WCI"), a Missouri corporation.
WHEREAS, the parties hereto desire that WCI be merged into and
with Buyer in accordance with the terms and conditions herein
contained; and
WHEREAS, for purposes of Federal income taxation, it is
intended that the Merger shall qualify as a reorganization under
Section 368(a) of the Code (as defined herein), and this Agreement
is intended to be and 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:
ARTICLE I
DEFINITIONS
1.1 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):
"Xxxxxxx" shall mean Xxxxxxx Securities, Inc.
"Buyer" shall mean PhoneTel II, Inc.
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"Closing" shall have the meaning set forth in Section 2.3
hereof.
"Closing Date" shall have the meaning set forth in Section 2.3
hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Disclosure Schedule" shall mean the disclosure schedule
delivered in connection herewith.
"Employment Agreements" shall have the meaning set forth in
Section 2.6(b) hereof.
"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
body, administrative or regulatory authority or instrumentality of
any such government or political subdivision.
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"Income Taxes" shall mean all Taxes based upon or measured by
income.
"Indemnitor" shall have the meaning set forth in Section 6.4
hereof.
"Joint Ventures" shall mean all of such party's rights and
interests in any joint ventures or other projects.
"Law" shall mean any law (including common law), rule,
regulation, restriction (including zoning), code, statute,
ordinance, order, writ, injunction, judgment, 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 2.1
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
2.3 hereof.
"Permits" shall mean any franchise, license, certificate,
approval, identification number, registration, permit,
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authorization, order or approval of, and any required registration
with, any Governmental Authority.
"Person" shall mean any individual, partnership, firm, trust,
association, corporation, joint venture, joint stock company,
unincorporated organization, Governmental Authority or other
entity.
"PhoneTel Financial Statements" shall have the meaning set
forth in Section 4.5 hereof.
"PhoneTel Phones" shall mean the microprocessor-based pay
telephones owned and operated by PhoneTel which are active and
generating income.
"PhoneTel Common Shares" shall mean the shares of PhoneTel
common stock $.01 par value.
"PhoneTel Preferred Shares" shall mean shares of the 10% Non-
voting Preferred Stock, without par value, $100 stated value, of
PhoneTel, substantially in the form attached as Annex A hereto.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning set forth in
Section 2.6(c).
"Taxes" shall mean all taxes, charges, fees, duties, levies,
penalties or other assessments imposed by any federal, state, local
or foreign Governmental Authority, including, but not limited to,
income, gross receipts, excise, property, sales, gain, use,
license, capital stock, transfer, franchise, payroll, withholding,
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social security or other taxes, including any interest, penalties
or additions attributable thereto.
"WCI" shall mean World Communications, Inc., a Missouri
corporation, and all of its subsidiaries.
"WCI Common Shares" shall mean the common shares, $.01 par
value, of WCI issued and outstanding as of the Closing.
"WCI Phones" shall mean the microprocessor-based pay telephones
owned and operated by WCI which are active and generating income.
"WCI Shareholders" shall have the meaning set forth in Section
2.2.
"WCI Subsidiaries" shall have the meaning set forth in Section
3.1 hereof (each, a "WCI Subsidiary").
ARTICLE II
TERMS OF MERGER; THE CLOSING
2.1 MERGER. On the date hereof, WCI shall be merged into and
with Buyer (the "Merger"). Buyer shall be the surviving corporation
of the merger and shall continue to exist and to be governed by the
laws of the State of Missouri. The Merger shall be consummated
pursuant to the terms of this Agreement and the Certificate of
Merger (substantially in the form attached hereto as Exhibit A)
all of which shall have been approved and adopted by the Board of
Directors and shareholders of WCI, and the Board of Directors of
PhoneTel and Buyer. The Merger shall be effective upon filing the
Certificate of Merger with the Secretary of State of the State of
Missouri ("Secretary of State") in accordance with the General
Corporation Law of Missouri. The separate corporate existence of
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WCI shall terminate upon the filing of the Certificate of Merger
with the Secretary of State and, as of that date, all the assets of
WCI shall vest in Buyer and all the liabilities of WCI shall be the
liabilities of Buyer as the surviving corporation of the merger.
At any time from and after the Closing, the last acting officers of
WCI shall in the name of WCI execute and deliver all assignments
and other instruments and take such further action as Buyer deems
necessary in order to carry out the intent and purpose of this
Agreement.
2.2 EXCHANGE OF CONSIDERATION. Shareholders of WCI (the "WCI
Shareholders") listed on Exhibit B attached hereto, shall be
entitled to receive, in the aggregate, 2,415,001, shares of
PhoneTel Common Shares and 530,534 shares of PhoneTel Preferred
Shares in exchange for all the assets of WCI and the WCI Common
Shares pursuant to the Merger.
Certificates representing the PhoneTel Preferred Shares and
the PhoneTel Common Shares shall be delivered to WCI to be
delivered to the WCI Shareholders as soon as practicable after
Closing in accordance with the number of shares set forth opposite
each WCI shareholder's name on Exhibit B.
2.3 CLOSING. The closing of the transactions contemplated
hereby is taking place at the offices of Xxxxxxxxxx, Xxxxxx &
Xxxxxxxxx, P.C., 000 Xxxxx Xxxxxxx, Xx. Xxxxx, Xxxxxxxx 00000 on
September 22, 1995 (the "Closing" or the "Closing Date"),
simultaneously with the execution of this Agreement, the
Certificate of Merger and other agreements, documents, instruments
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and writings executed and delivered pursuant hereto or in
connection herewith (collectively the "Other Documents").
2.4 DELIVERIES BY WCI. WCI and the WCI Shareholders are
delivering or will deliver the following to Buyer and PhoneTel:
(a) Stock certificates representing all of the WCI
Common Shares, accompanied by stock powers duly endorsed in blank
or accompanied by duly executed instruments of transfer;
(b) A certificate from each WCI shareholder in
substantially the form attached hereto as Exhibit C;
(c) A "Stockholder Representations and Warranties" letter
from each WCI shareholder in substantially the form attached hereto
as Exhibit D;
(d) A certificate, duly executed by an officer of WCI,
representing to Buyer and PhoneTel that Exhibit B is an accurate
and complete list of all WCI Shareholders and that there are no
other WCI Common Shares issued and outstanding; and
(e) Certified resolutions of the Board of Directors and
Shareholders of WCI approving this Agreement, the Other Documents
and the transactions contemplated hereby and thereby.
2.5 DELIVERIES BY BUYER AND PHONETEL. Buyer and PhoneTel are
delivering or will deliver the following to WCI:
(a) 2,415,001 PhoneTel Common Shares and 530,534
PhoneTel Preferred Shares, for distribution to WCI Shareholders;
(b) Certified resolutions of the Board of Directors and
Shareholders of Buyer, approving this Agreement and the Other
Documents and transactions contemplated hereby and thereby; and
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(c) Certified resolutions of the Board of Directors of
PhoneTel approving this Agreement, the Other Documents, the
transactions contemplated hereby and thereby; and
(d) A certificate, to be filed with Secretary of State
of Missouri pursuant to Section 351.458 RSMo., substantially in the
form attached as Exhibit E; and
(e) Opinion of Xxxx, Xxxxxx & Parks substantially in the
form attached as Exhibit F.
2.6 RELATED MATTERS.
(a) EMPLOYMENT AGREEMENTS. At the Closing, Xxxxxx
Xxxxxxxxx, Xxxx Xxxx and Xxxxx Xxxxxx are entering into the
Employment Agreements with PhoneTel which are attached hereto as
Exhibits G, H and I.
(b) SECURITY AGREEMENT. At the Closing, WCI II, Inc. (a
corporation to be formed prior to the Closing), PhoneTel and Buyer
shall enter into a Security Agreement, substantially in the form
attached as Exhibit J (the "Security Agreement").
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF WCI
WCI represents and warrants to Buyer and PhoneTel as follows:
3.1 ORGANIZATION AND STANDING; SUBSIDIARIES.
(a) WCI is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Missouri. Each of its subsidiaries (as defined in subsection (b)
hereof) is a corporation duly organized, validly existing and in
good standing under the laws of the state in which such subsidiary
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is incorporated. WCI 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. Except as
otherwise stated therein, Schedule 3.1(a) is a complete listing of
all jurisdictions in which WCI is duly qualified or licensed to do
business and is in good standing or in which WCI is presently doing
business.
(b) 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 subsidiary of such entity) controls, by virtue of
its ownership of more than 50% of the equity, or otherwise. All
subsidiaries of WCI (the "WCI Subsidiaries") and their respective
states of incorporation are set forth on Schedule 3.1(b) hereto.
No WCI Subsidiary is incorporated or conducts business in Texas
except that WCI had a subsidiary, West Texas Communications, Inc.
("WTC"), which operated in Texas until it was administratively
dissolved. Documentation, including a Certificate of Dissolution,
relating to WTC is disclosed in Schedule 3.1(b) of the Disclosure
Schedule. All of the outstanding shares of capital stock of each
WCI Subsidiary are validly issued, fully paid, nonassessable and
the outstanding shares of capital stock and partnership or other
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ownership interests in each WCI Subsidiary are owned free and clear
of any Encumbrances. WCI owns directly or indirectly all of the
issued and outstanding shares of the capital stock and partnership
or other ownership interest in each of its Subsidiaries. There are
no subscriptions, options, warrants, rights, calls, contracts,
voting trusts, proxies or other commitments, understandings,
restrictions or arrangements relating to the issuance, sale,
voting, transfer, ownership or other rights affecting any shares of
capital stock or partnership or other ownership interest in any WCI
Subsidiary, including any right of conversion or exchange under any
outstanding security instrument or agreement.
(c) WCI has used its best efforts to enable Buyer to
assume, without any adverse effect, WCI's interests in the Joint
Ventures set forth on Schedule 3.1(c) of the Disclosure Schedule.
3.2 ORGANIZATIONAL DOCUMENTS AND CORPORATE RECORDS.
(a) WCI has heretofore delivered to Buyer complete and
correct copies, with all amendments thereto, of the Certificate of
Incorporation, Articles of Incorporation and Bylaws of WCI, as
currently in effect, copies of which are attached hereto as
Exhibits K, L and M respectively. The minute books of WCI have
been made available to Buyer for its inspection and, except as set
forth on Schedule 3.2 of the Disclosure Schedule, such minute books
contain complete and correct records of all meetings, and consents
in lieu of a meeting, of WCI's Board of Directors (and any
committees thereof) and its shareholders since WCI's incorporation,
and accurately reflect all transactions referred to therein. The
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stock books and ledgers of WCI have been made available to Buyer
fob its inspection, and such books and ledgers are complete and
correct in all material respects.
(b) WCI has made available to Buyer all accounting,
corporate and financial books and records (the "Accounting Books
and Records") which relate to the business of WCI.
3.3 AUTHORIZATION. WCI 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 WCI 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 WCI and shall be enforceable against WCI in accordance with
their terms.
3.4 WCI CAPITALIZATION. As of the date hereof, the
authorized capital stock of WCI consists of 500,000 Common Shares,
$.01 par value, 432,178 of which are issued and outstanding and
owned by the WCI Shareholders ("WCI Common Shares"). WCI has no
other class of capital stock authorized or outstanding. None of
WCI's shares of capital stock have been reserved for any purpose.
All of WCI Common Shares are duly authorized, validly issued, fully
paid and nonassessable and were not issued in violation of any
preemptive rights. Except as set forth on Schedule 3.4 of the
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Disclosure Schedule, there are no (i) options, warrants, calls,
commitments, or rights of any character to purchase or otherwise
acquire from WCI shares of capital stock of any class, (ii)
outstanding securities of WCI that are convertible into or
exchangeable or exercisable for shares of any class of capital
stock of WCI, (iii) options, warrants or other rights to purchase
from WCI any such convertible or exchangeable securities, or (iv)
contracts, commitments, agreements, understandings or arrangements
of any kind relating to the issuance of any capital stock of WCI,
any options, warrants or rights, pursuant to which, in any of the
foregoing cases, WCI is or would be subject or bound.
3.5 CONSENTS AND APPROVALS; NO VIOLATION. Except as set
forth on Schedule 3.5 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 (a)
conflict with any provision of the Articles of Incorporation or
Bylaws (or other similar organizational documents) of WCI, (b)
require any consent, waiver, approval, authorization or Permit of,
or filing with or notification to, or any other action by, any
Governmental Authority by WCI, (c) violate any Law of Governmental
Authority applicable to WCI, or by which any of WCI's business,
properties or assets may be bound or affected or (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
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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 WCI is a party or
by which any of WCI's business, properties or assets may be bound
or affected.
3.6 ABSENCE OF UNDISCLOSED LIABILITIES.
(a) Except as set forth on Schedule 3.6(a) of the
Disclosure Schedule, WCI 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) 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.
(b) Schedule 3.6(b) of the Disclosure Schedule sets
forth a true, complete and accurate list of all liabilities of WCI
at the Closing.
3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set
forth on Schedule 3.7 of the Disclosure Schedule, since June 30,
1995:
(i) WCI 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
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for matters which apply to United States businesses
generally) any material adverse change in the
prospects of WCI; and
(iii) WCI has not incurred any material
damage, destruction or loss (whether or not covered
by insurance) to its owned or leased property or
assets.
3.8 COMPLIANCE WITH LAWS AND PERMITS.
(a) Except as set forth on Schedule 3.8(a) of the
Disclosure Schedule, the business and operation of WCI 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 WCI and all Permits relating to any of its
properties or applicable to its business.
(b) Except as and to the extent set forth on Schedule
3.8(b) of the Disclosure Schedule, WCI 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 WCI 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 WCI, threatened.
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(c) Except as and to the extent set forth on Schedule
3.8(c) of the Disclosure Schedule, WCI has made all filings and
received all approvals in connection with the Permits which are
necessary for Buyer to own and operate the property and assets of
WCI and to conduct WCI's business as it is currently and has
heretofore been conducted.
3.9 LITIGATION AND ARBITRATION
(a) No claim, action, cause of action, suit, proceeding,
inquiry, investigation or Order is pending or to the best of WCI's
knowledge threatened, against WCI or affecting its business,
operations, or assets, except as set forth on Schedule 3.9 of the
Disclosure Schedule. Except as set forth on Schedule 3.9 of the
Disclosure Schedule, there are no legal, administrative,
arbitration or other claims, actions, causes of action, suits,
proceedings, inquiries, investigations or Orders involving any
Governmental Authority, arbitration or mediation panel which are
pending, or to the best of WCI's knowledge, threatened, against WCI
or affecting its business, operations or assets. No Order of any
Governmental Authority, arbitrator or mediator is outstanding
against WCI, its business, operations or assets. WCI 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, against WCI or
affect its business, operations or assets.
(b) To the best of WCI's knowledge, no claim, action,
suit, proceeding, inquiry or investigation has been instituted
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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.
3.10 BROKERS. WCI entered into an agreement with M&M
Financial, Inc., a copy of which is attached hereto as Exhibit N,
in connection with the sale of WCI. WCI has no other 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 WCI.
3.11 WCI PHONES. There were 3,237 WCI Phones in operation as
of the close of business on June 30, 1995.
3.12 TELCO CHARGES AND LOCATION COMMISSION. WCI 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 3.12 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 operation of the business of WCI.
3.13 DISCLOSURE. WCI has not failed to disclose to PhoneTel
or Buyer any facts material to WCI's business, results of
operations, assets, liabilities, and financial condition. No
representation or warranty by WCI in this Agreement and no
statement by WCI in any of the Other Documents (including the
Disclosure Schedule) or previously disclosed to PhoneTel or Buyer,
contains any untrue statement of a material fact or omits to state
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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 IV
REPRESENTATIONS AND WARRANTIES OF BUYER AND PHONETEL
PhoneTel and Buyer represent and warrant to WCI as follows:
4.1 ORGANIZATION AND STANDING; SUBSIDIARIES.
(a) Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Missouri. Buyer has no subsidiaries. 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 carry
on its business and operations as currently and heretofore
conducted. Except as otherwise stated therein, Schedule 4.1(a) is
a complete listing of all jurisdictions in which Buyer is duly
qualified or licensed to do business and is in good standing or in
which Buyer is presently doing business.
(b) PhoneTel is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio.
Each of its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the state in which
such subsidiary is incorporated. PhoneTel 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. Except as otherwise stated therein, Schedule 4.1(b) is
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a complete listing of all jurisdictions in which PhoneTel is duly
qualified or licensed to do business and is in good standing or in
which PhoneTel is presently doing business.
4.2 AUTHORIZATION. Buyer and PhoneTel have 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 PhoneTel and 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 PhoneTel and Buyer and shall be
enforceable against PhoneTel and Buyer in accordance with their
terms.
4.3 CAPITALIZATION.
(a) As of the date hereof, the authorized capital stock
of PhoneTel consists of: (i) 22,500,000 common shares ("PhoneTel
Common Shares"), $.01 par value, 12,075,404 of which are issued and
outstanding, and (ii) 2,500,000 shares of Preferred Stock, $.01 par
value, of 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,
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cumulative and redeemable, of which 1,496 shares are outstanding;
(D) 16,000 shares have been designated 8% 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 PhoneTel
Preferred Shares (as defined herein), none of which is outstanding
prior to Closing; 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.
(b) Except as set forth in Schedule 4.3(b), there are no
(i) options, warrants, calls, commitments or right of any character
to purchase or otherwise acquire from PhoneTel shares of capital
stock of any class, (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, or (iv) contracts, commitments,
agreements, understandings or arrangements of any kind relating to
the issuance of any capital stock of PhoneTel, any options,
warrants or rights, pursuant to which, in any of the foregoing
19
22
cases, PhoneTel is or would be subject or bound; no other shares of
PhoneTel's capital stock have been reserved for any purpose.
(c) The authorized capital stock of Buyer consists of
30,000 shares, $0.01 par value, of which 1,000 shares are issued
and outstanding.
4.4 CONSENTS AND APPROVALS; NO VIOLATION. Except as set
forth on Schedule 4.4 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
Bylaws (or other similar organizational documents) of Buyer or
PhoneTel, (b) require any consent, waiver, approval, authorization
or Permit of, or filing with or notification to, or any other
action by, any Governmental Authority by Buyer or PhoneTel, (c)
violate any Law of Governmental Authority applicable to Buyer or
PhoneTel, or by which any of Buyer's or PhoneTel's business,
properties or assets may be bound or affected or (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 or PhoneTel
20
23
is a party or by which any of the business, properties or assets of
Buyer or PhoneTel may be bound or affected.
4.5 ABSENCE OF UNDISCLOSED LIABILITIES.
(a) Except as set forth on Schedule 4.5(a) of the
Disclosure Schedule, (i) PhoneTel 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
Statements") from Form 10QSB for the quarter ended June 30, 1995,
a copy of which are attached hereto as Exhibit O, 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 4.5(b) of the Disclosure Schedule sets
forth a true, complete and accurate list of all liabilities or
obligations of PhoneTel at the Closing.
4.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set
forth on Schedule 4.6 of the Disclosure Schedule, since June 30,
1995:
(i) PhoneTel 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
21
24
generally) any material adverse change in the
prospects of PhoneTel; and
(iii) PhoneTel has not incurred any material
damage, destruction or loss (whether or not covered
by insurance) to its owned or leased property or
assets.
4.7 COMPLIANCE WITH LAWS AND PERMITS.
(a) Except as set forth on Schedule 4.7(a) of the
Disclosure Schedule, the business and operation of PhoneTel 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 PhoneTel and all Permits
relating to any of its properties or applicable to its business.
(b) Except as and to the extent set forth on Schedule
4.7(b) of the Disclosure Schedule, PhoneTel 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 PhoneTel 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 PhoneTel, threatened.
22
25
(c) Except as and to the extent set forth on Schedule
4.7(c) of the Disclosure Schedule, PhoneTel has made all filings
and received all approvals in connection with the Permits which are
necessary for PhoneTel to own and operate the property and assets
of PhoneTel and to conduct PhoneTel's business as it is currently
and has heretofore been conducted.
4.8 LITIGATION AND ARBITRATION
(a) No claim, action, cause of action, suit, proceeding,
inquiry, investigation or Order is pending or to the best of
PhoneTel's knowledge threatened, against PhoneTel or affecting its
business, operations, or assets, except as set forth on Schedule
4.8 of the Disclosure Schedule. Except as set forth on Schedule
4.8 of the Disclosure Schedule, there are no legal, administrative,
arbitration or other claims, actions, causes of action, suits,
proceedings, inquiries, investigations or Orders involving any
Governmental Authority, arbitration or mediation panel which are
pending, or to the best of PhoneTel's knowledge, threatened,
against PhoneTel or affecting its business, operations or assets.
No Order of any Governmental Authority, arbitrator or mediator is
outstanding against PhoneTel, its business, operations or assets.
PhoneTel 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 PhoneTel or affect its business, operations or assets.
(b) To the best of PhoneTel's knowledge, no claim,
action, suit, proceeding, inquiry or investigation has been
23
26
instituted which threatens to restrain or prohibit or to otherwise
challenge the legality or validity of the transactions contemplate
by this Agreement or the Other Documents.
4.9 BROKERS. PhoneTel entered into an agreement with Xxxxxxx
Securities, a copy of which is attached hereto as Exhibit P.
PhoneTel has no other 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 Buyer or PhoneTel, other than the issuance of warrants
in connection therewith.
4.10 PHONETEL PHONES. There were 5,400 PhoneTel Phones in
operation as of the close of business on June 30, 1995.
4.11 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 4.11 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.
4.12 DISCLOSURE. Neither PhoneTel nor Buyer has failed to
disclose to WCI any facts material to PhoneTel's business, results
of operations, assets, liabilities, and financial condition. No
representation or warranty by PhoneTel and Buyer in this Agreement
and no statement by PhoneTel and Buyer in any of the Other
Documents (including the Disclosure Schedule), contains any untrue
24
27
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 V
FURTHER ASSURANCES; COOPERATION
5.1 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.
5.2 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, financial advisors, and other representatives
which were not paid prior to or at the Closing, shall be paid by
the surviving corporation of the merger; provided, however, the
surviving corporation shall not be liable for expenses incurred
(whether prior or subsequent to, or simultaneous with, the
execution of this Agreement) in connection with any services
provided to or any fees paid by any WCI shareholder, director,
officer or employee, which relate to such individual person's needs
or concerns.
25
28
5.3 REPAYMENT OF LOANS TO SHAREHOLDERS OF WCI. The parties
agree that any loans made to WCI by its Shareholders as listed on
Schedule 5.3 (the "Shareholder Loans"), which, at the time of
Closing, were in the amount of Six Hundred Twenty-five Thousand
Dollars ($625,000.00), will be repaid to said Shareholders from
first funds available from any financing obtained for PhoneTel by
Xxxxxxx or any other investment banking firm or any other sale of
securities by PhoneTel pursuant to a registration statement, which
exceeds an aggregated amount of Ten Million Dollars
($10,000,000.00). In any event, Buyer or PhoneTel shall repay the
Shareholder Loans within one (1) year from the date hereof.
5.4 REGISTRATION RIGHTS AGREEMENT. The parties shall execute
a Registration Rights Agreement substantially in the form attached
hereto as Exhibit Q.
ARTICLE VI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
6.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of WCI, PhoneTel and 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) thirty (30) days after 1995 audited
financial statements of PhoneTel and Buyer are received by the
Board of Directors of PhoneTel, (ii) the date on which any
secondary offering for the shares of stock of PhoneTel occurs or
(iii) upon the effective registration pursuant to the Securities
Act of PhoneTel Common Shares received by shareholders of WCI.
26
29
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.
6.2 INDEMNIFICATION OF PHONETEL AND BUYER. WCI's
shareholders agree to indemnify PhoneTel and Buyer from any loss
incurred by reason of any breach of the representations in Section
3.6. Any loss described above which was required to be paid in
cash shall give rise to a Claim as defined in Section 6.5 below;
provided, however, that a party shall have a Claim only for the
value of the loss or losses which, in the aggregate, exceed Two
Hundred Fifty Thousand Dollars ($250,000.00).
6.3 INDEMNIFICATION OF WCI SHAREHOLDERS. PhoneTel and Buyer
agree to indemnify WCI's shareholders from any loss incurred by
reason of any breach of the representations in Section 4.5(a). Any
loss described above which was required to be paid in cash shall
give rise to a Claim as defined in Section 6.5 below; provided,
however, that a party shall have a Claim only for the value of the
loss or losses which, in the aggregate, exceed Two Hundred Fifty
Thousand Dollars ($250,000.00).
6.4 ASSERTION OF CLAIMS. 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 the party from whom
the Claiming Party seeks indemnification (the "Indemnitor"). The
parties shall negotiate in good faith to determine the validity and
27
30
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
the largest (based upon United States revenues) United States firm
of certified public accountants (the "Accounting Firm") with offices
in St. Louis, Missouri and Cleveland, Ohio willing to accept such
engagement that is not nor has been employed by WCI or PhoneTel;
provided, however, that either PhoneTel or WCI may disqualify one
firm without cause. The Accounting Firm shall review this
Agreement, such Other Documents or information which it believes is
relevant to its determination, and the Claim. Based upon its
review, the Accounting Firm shall determine the value of the Claim.
The decision of the Accounting Firm shall be final and binding upon
the parties.
ARTICLE VII
MISCELLANEOUS
7.1 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 WCI, PhoneTel and 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
assign its rights and obligations hereunder to PhoneTel, provided,
however, that the Buyer shall remain liable for all of its
obligations.
28
31
(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 WCI and their heirs, successors and permitted
assigns.
7.2 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.
7.3 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.
7.4 WAIVER OF COMPLIANCE. No amendment, modification,
alteration, supplement or waiver of compliance with any obligation,
covenant, agreement, provision or condition hereof or consent
pursuant to this Agreement shall be effective unless evidenced by
an instrument in writing executed by all of the parties 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.
29
32
7.5 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 necessary in order to
render the same enforceable, consistent with the expressed
objectives of the parties hereto for entering into this Agreement.
7.6 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.
7.7 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.
7.8 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the law of the State of Missouri
30
33
without giving effect to the conflicts of law principles of such
jurisdiction.
7.9 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
or certified mail (postage prepaid, return receipt requested) to
the parties at the following addresses:
(a) If to Buyer or 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 WCI:
World Communications, Inc.
00000 Xxxxxxx Xxxx Xxxx
Xx. Xxxxx, XX 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Attn: Xxxxxx Xxxxxxxxx
31
34
with copy to:
Xxxxxxxxxx, Xxxxxx & Xxxxxxxxx, P.C.
000 Xxxxx Xxxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Attn: Xxxx X. Xxxxxxxx, 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.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, on the day and year first above written.
WCI:
WORLD COMMUNICATIONS, INC.
By:/s/ Xxxxxx Xxxxxxxxx
Xxxxxx Xxxxxxxxx, Chairman
PhoneTel:
PHONETEL TECHNOLOGIES, INC.
By:/s/ X. Xxxx
Name:
Title: Chairman
BUYER:
PHONETEL II, INC.
By:/s/
Name:/s/
Title: President
32
35
INDEX OF EXHIBITS TO
AGREEMENT AND PLAN OF MERGER
A - Certificate of Merger
B - WCI Shareholders
C - Certificate of Ownership
D - Stockholder Representations and Warranties
E - Intentionally Omitted
F - Intentionally Omitted
G - Employment Agreement - Xxxxxx Xxxxxxxxx
H - Employment Agreement - Xxxx Xxxx
I - Employment Agreement - Xxxxx Xxxxxx
J - Security Agreement
K - WCI Certificate of Incorporation
L - WCI Articles of Incorporation
M - WCI Bylaws
N - M & M Financial, Inc. Agreement
O - PhoneTel Financial Statements - 10Q
P - Xxxxxxx Securities Fee Letter
Q - Registration Agreement
36
EXHIBIT A
State of Missouri . . . . Office of Secretary of State
XXX X. XXXXX, Secretary of State
SEAL
CORPORATION DIVISION
Articles of Merger
(To be submitted in duplicate by an attorney.)
XXXXXXXXX XXX X. XXXXX
SECRETARY OF STATE
STATE OF MISSOURI
X.X. XXX 000
XXXXXXXXX XXXX, XX 00000
Pursuant to the provisions of The General and Business Corporation Law
of Missouri, the undersigned Corporations certify the following:
(1) That World Communications, Inc. of Missouri
------------------------------------------- -----------------------
(Name of corporation) (Parent state)
(2) That PhonTel, II, Inc. of Missouri
------------------------------------------- -----------------------
(Name of corporation) (Parent state)
(3) That of
------------------------------------------- -----------------------
are hereby merged and that the above named PhoneTel, II, Inc.
--------------------------------
(Name of corporation)
is the surviving corporation.
(4) That the Board of Directors of World Communications, Inc.
--------------------------------------------
(Name of corporation)
met on August 29, 1995 and by resolution adopted by a majority vote
------------------------
of the members of such board approved the Plan of Merger set forth in these
articles.
(5) That the Board of Directors of PhoneTel, II, Inc.
--------------------------------------------
(Name of corporation)
met on and by resolution adopted by a majority vote of
-------------- ------
the members of such board approved the Plan of merger set forth in these
articles.
(6) That the Board of Directors of
--------------------------------------------
(Name of corporation)
met on August 29, 1995 and by resolution adopted by a majority vote
------------------------
of the members of such board approved the Plan of Merger set forth in these
articles.
(7) The Plan of Merger thereafter was submitted to a vote at the special
meeting of the shareholders of World Communications, Inc. held on
----------------------------------
August 31, 1995 at 4:00 p.m. and at such meeting there were
253,684 shares entitled to vote and 253,684 voted in favor
------------- ----------------
and -0- voted against said plan.
---------
(8) The Plan of Merger thereafter was submitted to avote at the special meeting
of the shareholders of PhoneTel, II Inc. held on September 21, 1995
--------------------- ----------------------
at 3:00 p.m. and at such meeting there were 1,000 shares entitled
------------- -----------
to vote and 1,000 voted in favor and -- voted against said plan.
--------- --------
(9) The Plan of Merger thereafter was submitted to a vote at the special
meeting of the shareholders of
--------------------------------------------
held on at and at such meeting were
------------------- -------------------
shares entitled to vote and voted in favor and voted
-------- ---------- -------
against said plan.
D. PLAN OF MERGER
1. PhonTel, II, Inc. of Missouri
------------------------------- ---------------------
is the survivor.
2. All of the property, rights, privileges, leases and patents of the
World Communications, Inc. Corporation and
---------------------------------- -----------------------
are to be transferred to and become the property of PhoneTel, II., Inc.
-----------------------
the survivor. The officers and board of directors of the abovbe named
corporqation are authorized to execute all deeds assignments and
documents of every nature which may be needed to effectuate a full and
complete transfer of ownership.
37
EXHIBIT A
State of Missouri . . . . Office of Secretary of State
XXX X. XXXXX, Secretary of State
SEAL
CORPORATION DIVISION
Articles of Merger
(To be submitted in duplicate by an attorney.)
XXXXXXXXX XXX X. XXXXX
SECRETARY OF STATE
STATE OF MISSOURI
X.X. XXX 000
XXXXXXXXX XXXX, XX 00000
Pursuant to the provisions of The General and Business Corporation Law
of Missouri, the undersigned Corporations certify the following:
(1) That World Communications, Inc. of Missouri
------------------------------------------- -----------------------
(Name of corporation) (Parent state)
(2) That PhonTel, II, Inc. of Missouri
------------------------------------------- -----------------------
(Name of corporation) (Parent state)
(3) That of
------------------------------------------- -----------------------
(Name of corporation) (Parent state)
are hereby merged and that the above named PhoneTel, II, Inc.
--------------------------------
(Name of corporation)
is the surviving corporation.
(4) That the Board of Directors of World Communications, Inc.
--------------------------------------------
(Name of corporation)
met on August 29, 1995 and by resolution adopted by a majority vote
------------------------
of the members of such board approved the Plan of Merger set forth in these
articles.
(5) That the Board of Directors of PhoneTel, II, Inc.
--------------------------------------------
(Name of corporation)
met on and by resolution adopted by a majority vote of
--------------
the members of such board approved the Plan of Merger set forth in these
articles.
(6) That the Board of Directors of
--------------------------------------------
(Name of corporation)
met on and by resolution adopted by a majority vote
------------------------
of the members of such board approved the Plan of Merger set forth in these
articles.
(7) The Plan of Merger thereafter was submitted to a vote at the special
meeting of the shareholders of World Communications, Inc. held on
----------------------------------
August 31, 1995 at 4:00 p.m. and at such meeting there were
253,684 shares entitled to vote and 253,684 voted in favor
------------- ----------------
and -0- voted against said plan.
---------
(8) The Plan of Merger thereafter was submitted to avote at the special meeting
of the shareholders of PhoneTel, II Inc. held on September 21, 1995
--------------------- ----------------------
at 3:00 p.m. and at such meeting there were 1,000 shares entitled
------------- -----------
to vote and 1,000 voted in favor and -- voted against said plan.
--------- --------
(9) The Plan of Merger thereafter was submitted to a vote at the special
meeting of the shareholders of
--------------------------------------------
held on at and at such meeting were
------------------- -------------------
shares entitled to vote and voted in favor and voted
-------- ---------- -------
against said plan.
D. PLAN OF MERGER
1. PhonTel, II, Inc. of Missouri
------------------------------- ---------------------
is the survivor.
2. All of the property, rights, privileges, leases and patents of the
World Communications, Inc. Corporation and
---------------------------------- -----------------------
are to be transferred to and become the property of PhoneTel, II., Inc.
-----------------------
the survivor. The officers and board of directors of the above named
corporation are authorized to execute all deeds assignments and
documents of every nature which may be needed to effectuate a full and
complete transfer of ownership.
38
3. The officers and board of directors of PhoneTel, II, Inc.
-------------------------------------
shall continue in office until their successors are duly elected and
qualified under the provisions of the by-laws of the surviving corporation.
4. The outstanding shares of World Communications, Inc. ("WCI")
--------------------------------------------------
shall be exchanged for shares of PhoneTel Technologies, Inc. ("PhoneTel")
-------------------------------------------
on the following basis:
For each share of common stock of WCI held by a shareholder of WCI,
such shareholder shall receive approximately 5.5 shares of PhoneTel common
stock and * shares of PhoneTel preferred stock.
*1.2
5. The outstanding shares of
--------------------------------------------------
shall be exchanged for shares of
-------------------------------------------
on the following basis:
6. The articles of incorporation of the survivor are amended as follows:
After the merger, PhoneTel, II, Inc. shall change its name to World
Communications, Inc.
WITNESS WHEREOF, these Articles of Merger have been executed in duplicate by
the aforementioned corporations as to day and year hereafter acknowledged.
CORPORATE SEAL World Communications, Inc.
---------------------------------------
(Name of Corporation)
By Xxxx Xxxx
------------------------------------
Its President or Vice-President
ATTEST:
Xxxxx X. Xxxxxx
----------------------------------------
Its Secretary or Assistant Secretary
CORPORATE SEAL PhoneTel, II, Inc.
---------------------------------------
(Name of Corporation)
By Xxx X. Xxxx
------------------------------------
Its President or Vice-President
ATTEST:
Xxxxxx X. Trenton
----------------------------------------
Its Secretary or Assistant Secretary
CORPORATE SEAL
---------------------------------------
(Name of Corporation)
By
------------------------------------
Its President or Vice-President
ATTEST:
----------------------------------------
Its Secretary or Assistant Secretary
39
State of: Missouri
------------------------ \
County of: St. Louis | ss
----------------------- /
I, /s/ Xxxx X. Xxxxx , a Notary Public,
-----------------------------------------------
do hereby certify that on the 21st day of September, 1995,
--------------- --------------------------
personally appeared before me Xxxx Xxxx
-----------------------------------------------
who being by me first duly sworn, declared that he is the President
-------------------
of World Communications, Inc.
-------------------------------------------------------------------------
that he signed the foregoing document as President of the corporation, and that
---------
the statements therein contained are true.
------------------------------
[Notarial Seal]| XXXX X. XXXXX | /s/ Xxxx X. Xxxxx
| NOTARY PUBLIC NOTARY SEAL | ----------------------
| STATE OF MISSOURI | Notary Public
| ST. LOUIS COUNTY |
|MY COMMISSION EXPIRES 3/25/96| My commission expires ___________
-------------------------------
State of: Missouri
------------------------ \
County of: St. Louis | ss
----------------------- /
I, /s/ Xxxx X. Xxxxx , a Notary Public,
-----------------------------------------------
do hereby certify that on the 21st day of September, 1995,
--------------- --------------------------
personally appeared before me Xxxxxx Xxxx
-----------------------------------------------
who being by me first duly sworn, declared that he is the President
-------------------
of PhoneTel, II, Inc.
-------------------------------------------------------------------------
that he signed the foregoing document as President of the corporation, and the
---------
the statements therein contained are true.
------------------------------
[Notarial Seal]| XXXX X. XXXXX | /s/ Xxxx X. Xxxxx
| NOTARY PUBLIC NOTARY SEAL | ----------------------
| STATE OF MISSOURI | Notary Public
| ST. LOUIS COUNTY |
|MY COMMISSION EXPIRES 3/25/96| My commission expires ___________
-------------------------------
State of:
------------------------ \
County of: | ss
----------------------- /
I, , a Notary Public,
-----------------------------------------------
do hereby certify that on the day of 19
--------------- ------------------, ------,
personally appeared before me
-----------------------------------------------
who being by me first duly sworn, declared that he is the
-------------------
----------------------------------------------------------------------------
that he signed the foregoing document as of the corporation, and the
---------
the statements therein contained are true.
--------------------------------------
Notary Public
My commission expires ________________
40
EXHIBIT B
EXHIBIT B
Shares after
Name Address Conversion
---- ------- ------------
Xxxxxxxx, Xxxx #1 Xxxxx 4,333
Xx. Xxxxx, Xxxxxxxx 00000
Xxxxxxxx, Xxxxxx 7921 Stanford 3,659
Xx. Xxxxx, XX 00000
Xxxxxxxxxx, Xxxx X. 000 Xxxxx Xxxxxxx, Xxx. 000 000
Xx. Xxxxx, Xxxxxxxx 00000
Xxxx Xxxxx Trust for the separate 0000 Xxxxx Xxxx 5,000
account of Xxxx X. Xxxxxxxxxx under Xx. Xxxxx, Xxxxxxxx 00000
Xxxxxxxxxx, Xxxxxx & Xxxxxxxxx Profit
Sharing Plan Account #40218-0101-8820
Xxxx Xxxxx Bank, Xxxxx Road,
St. Louis, MO
Xxxxxxxxxx, Xxxxxx 0000 Xxxxxx Xxx Xxxx 000
Xxxxxxx, Xxxxxxxx 00000
Xxxxxxxxxx, Xxxxx X. 000 Xxxxxxxx Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Xxxxxxxxxx, Xxxx X. 0000 Xxxxx Xxxx 000
Xxxxxxx, Xxxxxxxx 00000
Xxxxxxxxxx, Xxxxx X. 00 Xxxxx Xxxx 000
Xxxxxxxxx, XX 00000
Xxxxxxxxxx, Xxxx, Xx. 0000 Xxxx Xxxx Xxxx 000
Xxxxxxx Xxxxxxx, XX 00000
French, Xxxxxx X., Trustee of the X.X. Xxx 000 900
Xxxxxx X. Xxxxxx Revocable Trust Xxx Xxxxxx Xxxxx, XX 00000
Agreement dtd. 6/30/95
Xxxxxxxxx, Xxxxxx or his successors 00000 Xxxxxxxx Xxxx 1,000
Trustee under living trust of Xxxxxx Xx. Xxxxx, XX 00000-0000
Galakatos, dated 10/25/89
Xxxxxxxxx, Xxxxxx or his successors 00000 Xxxxxxxx Xxxx 25,250
Trustee under living trust of Xxxxxx Xx. Xxxxx, XX 00000-0000
Galakatos, dated 10/25/89
Xxxxxxx, Xxxxx 000 Xxxxxxx Xxxxxx 000
Xx. Xxxxx, XX 00000
Xxxxxxxxx, Xxxxxxxx X. and Xxxxxx 000 Xxxxx Xxxxxxx 1,600
X. Xxxxxxxxx, with right of survivorship Xx. Xxxxx, Xxxxxxxx 00000
Xxxxxx, Xxxxxxx 00 Xxxxxx Xxxxx Xxxxx 000
Xx. Xxxxxx, Xxxxxxxx 00000
41
Shares after
Name Address Conversion
---- ------- ------------
Xxxxxx, Xxxxx 00 Xxxxxx Xxxxx Xxxxx 10,000
Xx. Xxxxxx, Xxxxxxxx 00000
Xxxxxx, Xxxxxxx X. and Xxxxx X. 00 Xxxxxx Xxxxx Xxxxx 2,166
Xxxxxx, Joint Tenants with rights of Xx. Xxxxxx, Xxxxxxxx 00000
survivorship
Xxxxxxx, Xxxxx X.X. Xxx 0000 1,000
Xxxxxxxxxx, XX 00000
Xxxxxxx, Xxxxxxx X.X. Xxx 0000 3,474
Xxxxxxxx, XX 00000
Xxxxxxx, Xxxxxx X.X. Xxx 0000 1,000
Xxxxxxxx, XX 00000
Xxxxxxx, Xxxxx X.X. Xxx 0000 3,474
Xxxxxxxx, XX 00000
Xxxxxxx, Xxxxx 000 Xx. Xxxx, Xxxxx 000 0,000
Xxxxxx, XX 00000
Xxxxxxxxx, Xxxxx 00 Xxxx Xxxxxx 0,000
Xx Xxxxx, XX 00000
Xxxxxxxxx, Xxxxxx X. 00 Xxxx Xxxxxx 0,000
Xx. Xxxxx, XX 00000
Xxxxxxxxx, Xxxxxx, Trustee U/T dtd. 32 Lake Forest 54,466
03/12/91, f/b/o Xxxxxx Xxxxxxxxx Xx. Xxxxx, XX 00000
Xxxxxxxxx, Xxxxxx, M. Trustee U/T dtd. 32 Lake Forest 50,000
03/12/91, f/b/o Xxxxxx X. Xxxxxxxxx Xx. Xxxxx, XX 00000
Xxxxxxx, Xxxx 0000 Xxxxxx Xxx. Xxxxx 00,000
Xx. Xxxxx, XX 00000
Xxxxxxxxxxx, Xxxxxxx 00000 Xxxxxx Xxxx 000
Xx. Xxxxx, XX 00000
Xxxxxxx Xxx Xxxxxxxxxxx, as custodial 00000 Xxxxxx Xxxx 10
trustee for Xxxxxx Xxxx Xxxxxxxxxxx Xx. Xxxxx, XX 00000
under the Missouri Transfer to Minors
Law
Xxxxxxx Xxx Xxxxxxxxxxx, as custodial 00000 Xxxxxx Xxxx 10
trustee for Xxxxxxxx Xxxx Xxxxxxxxxxx Xx. Xxxxx, XX 00000
under the Missouri Transfer to Minors
Law
Xxxxxxxxx, Xxxxxx 12300 Ballas Xxxxx Court 5,333
Xx. Xxxxx, XX 00000
2
42
Shares after
Name Address Conversion
---- ------- ------------
Xxxxxxxxx, Xxxxxx #0 Xxxxxxxx Xxxxx 2,000
Xx. Xxxxx, XX 00000
Xxxxxxxxx, Xxxxxxx 00000 Xxxxxx Xxxx 0,000
Xx. Xxxxx, XX 00000
Xxxxxxxxx, Xxxxxxx, XX 00 Xxxx Xxxxxx Xxxxx 0,000
Xx. Xxxxx, XX 00000
Xxxx, Xxxxxxx X., Trustee f/b/o Xxxxxxx 000 Xxxxx Xxxxxxx, Xxx. 000 3,127
X. Xxxx U/T 8/18/87 Xx. Xxxxx, XX 00000
Xxxx, Xxxxxxx X. Xxxx Xxxxx Trust for 0000 Xxxxx Xxxx 13,333
separate account of Xxxxxxx X. Xxxx Xx. Xxxxx, Xxxxxxxx 00000
under Xxxxxxxxxx, Xxxxxx & Xxxxxxxxx
Profit Sharing Plan account #40218-
0103
XxXxxxxx, Xxxx X., Xx., Trustee f/b/o 0000 Xxxxxxxxx Xxxxx 1,935
Xxxx X. XxXxxxxx, Xx. dtd. 07/19/83 Xx. Xxxxx, XX 00000
XxXxxxxx, Xxxx X., Xx., Trustee f/b/o 0000 Xxxxxxxxx Xxxxx 1,666
Xxxx X. XxXxxxxx, Xx. dtd. 07/19/83 Xx. Xxxxx, XX 00000
XxXxxxxx, Xxxx X., Xx. and Xxxxxxxx X. 0000 Xxxxxxxxx Xxxxx 500
XxXxxxxx, Trustees U/A dtd. 07/19/83 Xx. Xxxxx, XX 00000
f/b/o Xxxx X. XxXxxxxx, Xx., Trustee
Xxxxxx, Xxxx 701 Market, Suite 1000 53,825
Xx. Xxxxx, Xxxxxxxx 00000
Xxxxxxxxxx, Xxxxxx X., Trust dtd. #0 Xxxxxxxxx Xxxx 100
06/04/86, Xxxxxx X. Xxxxxxxxxx, Xx. Xxxxx, XX 00000
Trustee
Xxxxxxxxxx, Xxxxxxxx, Trust dtd. #0 Xxxxxxxxx Xxxx 650
10/11/90, Xxxxxxxx X. Xxxxxxxxxx, Xx Xxxxx, XX 00000
Trustee
Xxxxxx, Xxxxxx X. 0 Xxxx Xxxxx 000
Xx. Xxxxx, XX 00000
Xxxxxx, Xxxxxxx, Custodian for 6 High Acres 500
Xxxxxxxxx X. Xxxxxx Xx. Xxxxx, XX 00000
Xxxxxx, Xxx X. 0 Xxxx Xxxxx 000
Xx. Xxxxx, XX 00000
Xxxxxx, Xxxxxxx, M.D. 6 High Acres 5,000
Xx. Xxxxx, XX 00000
Xxxxx, Xxxx X. or Xxxxx M.B. Xxxxx 0000 Xxxxxx Xxxxx 4,348
with right of survivorship Xx. Xxxxx, XX 00000
3
43
Shares after
Name Address Conversion
---- ------- ------------
Xxxx, Xxxx 00000 Xxxxxx Xxxxx 48,000
Xx. Xxxxx, XX 00000
Xxxxx, Xxxxxx X., Trustee, Xxxxxx X. 000 Xxxxxx Xxxxxxx Xxxxx 50
Roman Revocable Living Trust dated Xxxxxxxxxxxx, XX 00000
12/29/78, as amended
Roman, Adele G., Trustee, Adele G. 000 Xxxxxx Xxxxxxx Xxxxx 50
Roman Revocable Living Trust dated Xxxxxxxxxxxx, XX 00000
12/19/78, as amended
Sale, Xxxx X. & Xxxxx X. Sale, Trustee 000 Xxxxx Xxxxxxx, Xxx. 000 5,752
f/b/o Xxxx X. Sale u/t dtd. 00/00/00, XXX Xx. Xxxxx, XX 00000
00-0000000
Sale, Xxxxx X. and Xxxx X. Sale, 000 Xxxxx Xxxxxxx, Xxx. 000 5,753
Trustee u/t dtd. 08/03/83, f/b/o Xxxxx Xx. Xxxxx, XX 00000
W. Sale
Xxxx, Xxxxxxx X. 00000 Xxxxxx Xxxx 0,000
Xx. Xxxxx, XX 00000
Xxxxxxxx, Xxxx X. 000 Xxxxx Xxxxxxx, Xxx. 000 000
Xx. Xxxxx, XX 00000
Xxxxxxx, Xxxxxxx X. 26 Clay 300
Xxxxxx, Xxxxxxxxxx 00000
Spitzer, Sanford, Trustee U/I/T dtd. 000 Xxxxx Xxxx, #00 33,065
06/29/88, Xxxxxxx X. Xxxxxxx Living Xx. Xxxxx, XX 00000
Trust
Xxxxxxx, Xxxxxx X., Trustee U/I/T dtd. 000 Xxxxx Xxxx, #00 3,474
06/29/88, Xxxxxx X. Xxxxxxx Living Trust Xx. Xxxxx, XX 00000
Xxxxxxx, Xxxxxxx X. 00 Xxxxxxx 000
Xxxxxxxxxx, XX 00000
Xxxxxxx-Xxxxxxx, Xxxxxx X. 000 Xxxxxx 000
Xxxxxxx, XX 00000
Willing, Xxxxxxx X. 4 Mony Blanc Court 500
Xxxxxxxxxx, XX 00000
Willing, Xxxxx 0 Xxxx Xxxxx Xxxxx 000
Xxxxxxxxxx, XX 00000
Xxxxx, Xxxxxx X. 000 Xxxxx Xxxxxxx, Xxx. 000 0,000
Xx. Xxxxx, XX 00000
Xxxxxx, Xxxxxx 000 Xxxxxxxxxx 5,000
Xxxxxxxxxxxx, XX 00000
4
44
EXHIBIT C
--
[LOGO] WORLD COMMUNICATIONS, INC.
CERTIFICATE OF OWNERSHIP
------------------------
The undersigned, ___________________________; being a shareholder of
World Communication, Inc. ("WCI") does hereby certify to PhoneTel Technologies,
Inc. ("PhoneTel") and Huntington National Bank ("Escrow Agent"), with respect
to the WCI Common Shares owned by the undersigned, that:
1. the undersigned is the record and benefical owner of,
and has good and marketable title to, ________ WCI
common shares of stock (the "Shares"), free and clear
of all encumberances;
2. the Shares owned by the undersigned are not subject to
any restrictions on transferability other than those
imposed by any applicable securities laws; and
3. the undersigned is acquiring PhoneTel shares of common
stock and PhoneTel shares of preferred stock pursuant
to the merger between PhoneTel II, Inc. and WCI for
the undersigned's own account and without a view to
public distribution thereof.
IN WITNESS WHEREOF, I have executed this Certificate of Ownership this
__________ day of September, 1995.
_____________________________
45
EXHIBIT D
-----
STOCKHOLDER REPRESENTATIONS AND WARRANTIES
------------------------------------------
This document is being delivered in connection with the proposed merger
(the "Merger") of World Communications, Inc. ("WCI") with and into a wholly
owned subsidiary of PhoneTel Technologies, Inc. ("PhoneTel") pursuant to the
Agreement and Plan of Merger (the "Merger Agreement") to be entered into among
PhoneTel, PhoneTel II, Inc. and WCI. The undersigned holder of shares of WCI
Common Stock (the "Stockholder") understands that, pursuant to the Merger,
his/her shares of WCI Common Stock will be converted into shares of PhoneTel
Common Stock and Phonetel Preferred Stock (collectively, "Shares").
NAME: ____________________________________________
(Please Type or Print)
ADDRESS: ____________________________________________
SOCIAL SECURITY NUMBER: _________________________
NUMBER OF WCI SHARES HELD BY STOCKHOLDER:
_______________________
NUMBER OF WCI SHARES WHICH WOULD RESULT FROM STOCKHOLDER'S
CONVERSION INTO WCI COMMON STOCK OF ALL CONVERTIBLE
DEBENTURES OF WCI HELD BY STOCKHOLDER: _______
DATE:______________________________
46
PART I: ACCREDITED INVESTORS
(Based upon the definition of "accredited investor" in
Exhibit A hereto, please check one box below.)
__ Stockholder is an "accredited investor"
Stockholder Initials: __________
(Go to PART III)
__ Stockholder is not an "accredited investor"
(Continue to PART II)
PART II: KNOWLEDGE AND EXPERIENCE
Please check one of the boxes below.
__ Stockholder has such knowledge and experience in
financial and business matters that he/she is capable
of evaluating the merits and risks of the prospective
investment in the Shares. (Go to PART II(A))
__ Stockholder has relied upon a Purchaser Representa-
tive (as defined in Exhibit B hereto) in evaluating
the merits and risks of the prospective investment
in the Shares. (Go to PART II(B))
A. KNOWLEDGEABLE INVESTORS REPRESENTATIONS AND
WARRANTIES. The Stockholder hereby represents and war-
rants 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 in-
vestment in the Shares and the suitability of the Shares
as an investment.
Stockholder Initials: __________ (Go to PART III)
2
47
B. Purchaser Representative
------------------------
The Stockholder hereby represents and warrants
that the Purchaser Representative upon whom Stockholder
relied when making this investment decision meets the
criteria set forth in Exhibit B hereto.
Name of Purchaser Representative: ______________________
(Please Type or Print)
Occupation _______________________
Address _______________________
_______________________
Stockholder Initials: __________
(Continue to PART III)
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 con-
nection with, any distribution of the Shares. The under-
signed understands that the Shares have not been regis-
tered 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 representa-
tions contained herein for the purpose of determining
whether the Merger meets the requirements for such exemp-
tions.
(b) The Stockholder understands that no public
market now exists for any of the shares of PhoneTel
Preferred Stock and that PhoneTel has made no assurances
with respect to any market for the Shares.
(c) 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
3
48
Stockholder has had the opportunity to review the infor-
mation received in connection with this investment. The
Stockholder is familiar with the business and financial
condition, properties, operations and prospects of
PhoneTel and WCI and with the terms of the Merger and the
Merger Agreement.
(d) 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.
(e) (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 Merger, 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 profes-
sional, 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.
PART IV: RELATIVES
__ Please check this box if any relative, spouse, or
any relative of a spouse who has the same principal
residence as the Stockholder is also a stockholder
of WCI.
If you checked the box above, please list the names of
such persons:
__________________________________ _______________________________
__________________________________ _______________________________
__________________________________ _______________________________
4
49
PART B: MERGER
The Stockholder hereby approves the Merger and the
Merger Agreement, in the form previously furnished to
him/her, with such changes therein as the officers of WCI
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 the WCI 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 6.2 and 6.4 and the registration
rights provisions of the Merger Agreement; the Stockhold-
er further agrees to be bound by substantially identical
registration rights provisions with respect to the
Shares.
IN WITNESS WHEREOF, the Stockholder has execut-
ed this document as of the date set forth above.
-------------------------------------
Stockholder
Accepted and Agreed:
PHONETEL TECHNOLOGIES, INC.
By: ____________________
Date: 1995
50
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 ac-
xxxxxxx the securities offered, whose purchase is direct-
ed 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 in-
vestment; and
(4) Any entity in which all of the equity
owners are accredited investors.
6
51
EXHIBIT B
---------
"Purchaser Representative" shall mean any
person who satisfies all of the following conditions or
who the issuer of the securities being offered or sold
reasonably believes satisfies all of the following condi-
tions:
(1) Is not an affiliate, director, officer or
other employee of the issuer, or beneficial owner of 10
percent or more of any class of the equity securities or
10 percent or more of the equity interest in the issuer,
except where the purchaser is:
(i) A relative of the purchaser represen-
tative by blood, marriage or adoption and not more
remote than a first cousin;
(ii) A trust or estate in which the
purchaser representative and any persons related to
him as specified in paragraph (i) above or (iii)
below collectively have more than 50 percent of the
beneficial interest (excluding contingent interest)
or of which the purchaser representative serves as a
trustee, executor, or in any similar capacity; or
(iii) A corporation or other organization
of which the purchaser representative and any person
related to him as specified in paragraph (i) or (ii)
above collectively are the beneficial owners of more
than 50 percent of the equity securities (excluding
directors' qualifying shares) or equity interests;
(2) Has such knowledge and experience in
financial and business matters that he is capable of
evaluating, alone, or together with other purchaser
representatives of the purchaser, or together with the
purchaser, the merits and risks of the prospective in-
vestment;
(3) Is acknowledged by the purchaser in writ-
ing, during the course of the transaction, to be his
purchaser representative in connection with evaluating
the merits and risks of the prospective investment; and
7
52
(4) Discloses to the purchaser in writing a reasonable time prior to
the sale of securities to that purchaser any material relationship between
himself or his affiliates and the issuer or its affiliates that then exists,
that is mutually understood to be contemplated, or that has existed at any time
during the previous two years, and any compensation received or to be received
as a result of such relationship.
8
53
EXHIBIT G
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") made and entered into this
22nd day of September, 1995 by and between PhoneTel Technologies, Inc., an Ohio
corporation (hereinafter "PhoneTel") and Xxxxxx Xxxxxxxxx (hereinafter
"Xxxxxxxxx").
WHEREAS, PhoneTel desires to have Xxxxxxxxx'x experience and to secure
for itself the continued services and expertise of Xxxxxxxxx;
NOW, THEREFORE, in consideration of the premises and agreements
hereinafter contained, the parties agree as follows:
1. EMPLOYMENT. PhoneTel agrees to employ Xxxxxxxxx and Hollander
hereby accepts such employment, upon the terms and conditions hereinafter set
forth. Xxxxxxxxx shall provide advice and counsel to the PhoneTel at such
times as mutually agreed to by PhoneTel and Xxxxxxxxx. Xxxxxxxxx shall devote
such time and effort as he deems necessary to fulfill such duties.
2. TERM OF EMPLOYMENT. The term of Xxxxxxxxx'x employment shall
commence on the day and year first written above, and continue for twenty-four
(24) months unless terminated sooner pursuant to Paragraph 5 of this Agreement.
3. COMPENSATION.
a. BASE SALARY. During the first twelve (12) months of this
Agreement, PhoneTel shall pay Xxxxxxxxx an annual base salary of One Hundred
Twenty-Five Thousand Dollars ($125,000.00), less all required withholdings.
During the second twelve (12) months of this Agreement, PhoneTel shall pay
Xxxxxxxxx a base salary of One Hundred Thirty-Five Thousand Dollars
($135,000.00), less all required withholdings. Xxxxxxxxx'x base salary shall
be paid in equal installments on a regular basis consistent with PhoneTel's
payroll practices and procedures for similarly compensated employees. The
first twelve (12) month period of this Agreement begins on the day and year
first above written and ends on that same date twelve (12) months later. The
second twelve (12) month period of this Agreement begins on the day following
the expiration of the first twelve (12) month period of this Agreement and ends
on that same date twelve (12) months later.
b. Fringe Benefits. PhoneTel shall provide Hollander with any
and all fringe benefits, including, but not limited to, life insurance, medical
insurance, and pension and profit sharing privileges, if any, which are
commensurate with and which PhoneTel provides to similarly situated employees.
Such benefits are to commence on the date and year first above written and
shall continue throughout the term of this Agreement unless sooner terminated
pursuant to Paragraph 5.
54
c. CAR ALLOWANCE. PhoneTel shall provide Hollander with an
automobile and allowance substantially similar to officers of PhoneTel who are
similarly situated, but at a minimum shall provide Hollander with an automobile
allowance of Three Hundred Ninety Dollars ($390.00) per month during the term
of this Agreement which may be used for all expenses relating to his use of an
automobile including, but not limited to, maintenance, repairs and gasoline.
This car allowance shall be paid to Xxxxxxxxx each month. PhoneTel shall
provide Xxxxxxxxx with a gasoline credit card or cards in the name of PhoneTel
which may be used for automobile expenses.
d. BONUS. PhoneTel shall pay Xxxxxxxxx a guaranteed bonus of ten
percent (10%) of Xxxxxxxxx'x base salary for each of the two (2) twelve (12)
month employment periods contemplated by this Agreement. The bonus shall be
paid to Hollander on the first day of the last month of each employment period.
Notwithstanding the foregoing, no bonus shall be due and owing if PhoneTel has
no earnings before interest, taxes, depreciation and amortization ("EBITDA").
EBITDA shall be determined in accordance with generally accepted accounting
principles. If PhoneTel's Board of Directors establishes a bonus plan of which
Xxxxxxxxx is an eligible participant by the date such bonus payment is due,
then Hollander shall receive a bonus only if in accordance with the terms and
conditions of such plan. The Board of Directors may, in its sole and absolute
discretion, award a bonus to Xxxxxxxxx even if none was due to be awarded or
increase an awarded bonus.
4. REIMBURSEMENT FOR COMPANY EXPENSES. PhoneTel shall reimburse
Xxxxxxxxx for any expense he reasonably incurs on behalf of PhoneTel's business
or pursuant to performance of his duties under this Agreement, including all
travel, meals and lodging. Reimbursements shall be made each month for the
prior month's expenses, provided that such expenses have been reasonably
substantiated and documented.
5. TERMINATION OF EMPLOYMENT.
a. TERMINATION WITH CAUSE. PhoneTel shall have the right to
terminate this Agreement, at any time, for cause (as defined below). In such
event, PhoneTel's only liability or obligation to Xxxxxxxxx under this
Agreement shall be to pay Xxxxxxxxx'x base salary through the termination date
and to reimburse Xxxxxxxxx for any and all outstanding expenses he incurred
pursuant to Paragraph 4 of this Agreement on or before the termination date.
Upon such termination with cause, Xxxxxxxxx shall be subject to and bound by
the covenant not to compete set forth in Paragraph 6 provided PhoneTel pays
those amounts set forth in Paragraph 6(a). As used herein, the term "cause"
shall mean any violation of the covenants not to compete set forth in Paragraph
6, intoxication or drug use while performing duties on behalf of PhoneTel or
while on PhoneTel's premises, gross negligence, fraud or dishonesty affecting
PhoneTel's business or funds.
2
55
b. TERMINATION WITHOUT CAUSE. If PhoneTel terminates Xxxxxxxxx'x
employment for any reason other than a reason listed in Paragraph 5(a) above,
PhoneTel shall give Xxxxxxxxx thirty (30) days' prior written notice and shall
provide Hollander with all compensation, as defined by Paragraph 3 hereof,
including bonus pro-rata to date of termination, during what would otherwise be
the remaining term of this Agreement, provided Hollander signs a general
release to PhoneTel waiving any claims relating to his employment. Upon such
termination without cause, Xxxxxxxxx shall be subject to and bound by the
covenant not to compete set forth in Paragraph 6, provided PhoneTel pays those
amounts set forth in Paragraph 6(a).
c. VOLUNTARY RESIGNATION. Xxxxxxxxx shall have the right to
terminate this Agreement, at any time, upon fourteen (14) calendar days' prior
written notice to PhoneTel. In such event, PhoneTel's only liability or
obligation to Hollander under the terms of this Agreement shall be to pay
Xxxxxxxxx his base salary through the effective date of his termination and, on
the effective date of his termination, to pay Hollander for any unused vacation
time accrued as of the effective termination date and to reimburse Xxxxxxxxx
for any and all outstanding expenses he accrued pursuant to Paragraph 4 of this
Agreement on or before the effective termination date. Upon such voluntary
resignation, Xxxxxxxxx shall be subject to and bound by the covenant not to
compete set forth in Paragraph 6, provided PhoneTel pays those amounts set
forth in Paragraph 6(a).
d. TERMINATION POWER. The Chairman of the Board of Directors of
PhoneTel shall have the power, acting alone, to terminate this Agreement,
either with or without cause subject to the terms of this Section 5.
e. REMOVAL OF PROPERTY. PhoneTel acknowledges all of the office
furniture and possessions, other than the round conference table and three (3)
drawer file cabinet, in Xxxxxxxxx'x office in St. Louis are his own property
and that, upon termination for any reason, Xxxxxxxxx shall be entitled to
remove those possessions.
6. COVENANT NOT TO COMPETE. In consideration of the employment and
compensation paid by PhoneTel pursuant to this Agreement, Xxxxxxxxx agrees that
during the term of employment set forth herein and for a period of one (1) year
after termination of Xxxxxxxxx'x employment with PhoneTel (the "Non-Compete
Period"), regardless of how, when and why that employment ends, Hollander shall
not directly or indirectly solicit, employ or interfere with PhoneTel's
relationship with any of its employees, customers, location lessees, or agents
and shall not engage in (as a principal, partner, shareholder, director,
officer, agent, employee, consultant or otherwise) or be financially interested
in any business which is involved in business activities which are the same as,
similar to, or in competition with business activities carried on by PhoneTel,
or being definitely planned by PhoneTel at the time of the
3
56
termination of Xxxxxxxxx'x employment, within the states in which PhoneTel is
doing business at the time of Xxxxxxxxx'x termination or at any time during the
Non-Compete Period.
a. If the Non-Compete Period shall extend beyond the two (2) year
term of employment, PhoneTel shall pay Xxxxxxxxx, in equal monthly
installments, an amount equal to: (i) the product of (A) the number of days by
which the Non-Compete Period extends beyond the two (2) year term of employment
multiplied by (B) the Non-Compete Compensation Base, divided by (ii) three
hundred sixty-five (365). For purposes of the foregoing, Non-Compete
Compensation Base shall be forty percent (40%) of Xxxxxxxxx'x annualized
compensation:
(i) of the current twelve (12) month period if the
covenant not to compete becomes effective due to the
termination or resignation of Xxxxxxxxx; or
(ii) of the final twelve (12) month period if the covenant
not to compete becomes effective due to the natural
expiration of the term of this Agreement.
b. PhoneTel is permitted to release Hollander from the
provisions of this covenant not to compete and avoid the payment of the
amounts contemplated in this Paragraph 6, provided such release is received by
Hollander in writing upon termination or expiration of this Agreement.
7. INVESTMENT EXCEPTION. Notwithstanding anything herein to the
contrary, nothing in this Agreement is intended or shall be construed as
limiting Xxxxxxxxx'x right as an investor to hold or to acquire the investment
securities of any business entity that is registered on a national securities
exchange or admitted to trading privileges thereon or actively traded on a
generally recognized over-the-counter market, so long as Xxxxxxxxx'x interest
of any such business entity constitutes less than five percent (5%) of the
ownership therein; provided, that, Xxxxxxxxx'x actions or holdings do not
violate the rules or regulations of the Securities and Exchange Act of 1933 and
the Securities and Exchange Commission.
8. RELOCATION. If PhoneTel shall relocate offices such that it no
longer maintains an office in St. Louis, Xxxxxxxxx shall not be required to
move and he shall be able to fulfill his duties from his home.
9. DEATH OR DISABILITY OF EMPLOYEE. Upon Xxxxxxxxx'x death or
disability (as defined herein), all obligations of PhoneTel to make payments
under Paragraphs 3, 5 or 6 shall cease and terminate in the case of death, as
of the date of Xxxxxxxxx'x death, and in the case of disability, on the date
Xxxxxxxxx is disabled in accordance with the following. Xxxxxxxxx shall be
deemed to be disabled if he shall, as a result of such
4
57
disability, fail to perform the duties, as required hereunder for any three (3)
months during a consecutive four (4) month period.
10. AMENDMENTS. No amendment or modification of the terms or
conditions of this Agreement shall be valid unless in writing and signed by
both parties.
11. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding on PhoneTel, its successors and assigns, and any corporation
with which PhoneTel may merge or consolidate or to which PhoneTel may sell all
or substantially all of its business and assets, and shall inure to the benefit
of and be binding on Xxxxxxxxx, his executors, administrators, heirs and
personal and legal representatives. Since Xxxxxxxxx'x duties and services
hereunder are special, personal and unique in nature, Xxxxxxxxx may not
transfer, sell or otherwise assign his obligations under this Agreement.
12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13. SEVERABILITY. In the event that any of the terms, conditions or
provisions of this Agreement are held to be illegal, invalid or unenforceable
by any court of competent jurisdiction, the legality, validity and
enforceability of the remaining terms, conditions or provisions shall not be
affected thereby. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement a provision as similar in its terms as possible to be legal, valid
and enforceable.
14. REMEDIES UPON BREACH. In the event of any breach of this
Agreement by either party, the non-breaching party shall be entitled, if it so
elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either in law or in equity, to enjoin the breaching party from
violating any of the terms of this Agreement, to enforce specific performance
of any of the terms of this Agreement, and to obtain damages, or any of them,
but nothing herein contained shall be construed to prevent such remedy or
combination of remedies as the non-breaching party may elect to invoke. The
failure of the non-breaching party promptly to institute legal action upon any
breach of this Agreement shall not constitute a waiver of that or any other
breach, and shall not prevent later strict enforcement of the terms of this
Agreement.
15. CHOICE OF LAW. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Missouri.
16. NOTICES. All notices and communications required under this
Agreement shall be in writing and shall be deemed given if delivered personally
or sent by certified mail, return receipt
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requested, to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice which shall be deemed
effective when received):
(a) To PhoneTel:
000 Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Mr. Xxxxx Xxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: N.J. Terris, Esq.
(b) To Xxxxxxxxx:
Xx. Xxxxxx Xxxxxxxxx
00 Xxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
with a copy to:
Xxxx X. Xxxxxxxx
Xxxxxxxxxx, Xxxxxx & Xxxxxxxxx, P.C.
000 X. Xxxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
17. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties, and supersedes any other prior agreement or undertaking,
written or oral, between the parties with respect to the subject matter hereof
and thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
PHONETEL XXXXXXXXX
By:
----------------------------- -----------------------------
Xxxxxx Xxxxxxxxx
Its:
----------------------------
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EXHIBIT H
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") made and entered into this
22nd day of September, 1995, by and between PhoneTel Technologies, Inc., an
Ohio corporation (hereinafter "PhoneTel"), and Xxxx Xxxx (hereinafter "Pace").
WHEREAS, Pace is currently employed by World Communications, Inc., a
Missouri corporation (hereinafter "WCI"), as its President, and is a valuable
and key employee; and
WHEREAS, PhoneTel and WCI are both parties to that certain Agreement
and Plan of Merger executed of even date herewith; and
WHEREAS, PhoneTel desires to retain Pace's experience and to secure for
itself the continued services and expertise of Pace;
NOW, THEREFORE, in consideration of the premises and agreements
hereinafter contained, the parties agree as follows:
1. EMPLOYMENT. PhoneTel agrees to employ Pace as Chief Operating
Officer of the surviving entity pursuant to the Agreement and Plan of Merger,
and Pace hereby accepts such employment, upon the terms and conditions
hereinafter set forth. Pace shall perform, to the best of his abilities, the
duties customarily performed by persons in the position in which he is engaged
and such other duties as PhoneTel's Board of Directors or its delegate may
reasonably assign to Pace from time to time. Pace shall devote his full
business time and efforts to rendering such services.
2. TERM OF EMPLOYMENT. The term of Pace's employment shall commence
on the day and year first written above, and continue for twenty-four (24)
months unless terminated sooner pursuant to Paragraph 5 of this Agreement.
3. COMPENSATION.
a. BASE SALARY. During the first twelve (12) months of this
Agreement, PhoneTel shall pay Pace a base salary of One Hundred Ten Thousand
Dollars ($110,000.00), less all required withholdings. During the second
twelve (12) months of this Agreement, PhoneTel shall pay Pace a base salary of
One Hundred Twenty Thousand Dollars ($120,000.00), less all required
withholdings. Pace's annual salary shall be paid in equal installments on a
regular basis consistent with PhoneTel's payroll practices and procedures for
similarly compensated employees. If Pace is relocated pursuant to Paragraph 7
hereof, Pace's base salary shall be increased proportionately for any increase
in the cost of living of the area to which Pace is relocated over St. Louis as
determined by the current publication of Places Rated" or other nationally
recognized publication.
60
The first twelve (12) month period of this Agreement begins on the day and
year first above written and ends on that same date twelve (12) months later.
The second twelve (12) month period of this Agreement begins on the day
following the expiration of the first twelve (12) month period of this
Agreement and ends on that same date twelve (12) months later.
b. FRINGE BENEFITS. PhoneTel shall provide Pace with any and all
fringe benefits, including, but not limited to, life insurance, medical
insurance, and pension and profit sharing privileges, if any, which are
commensurate with and which PhoneTel provides to similarly situated employees.
Pace shall be entitled to three (3) weeks of vacation per twelve (12) month
period of the term of this Agreement, but shall not use more than two (2) weeks
of such vacation consecutively. PhoneTel further agrees to maintain Pace's
membership with the Missouri Athletic Club, St. Louis, Missouri, at PhoneTel's
expense. During the term of his employment, PhoneTel shall provide Pace, at
PhoneTel's sole expense, a mobile telephone. Such benefits are to commence on
the date and year first above written and shall continue throughout the term of
this Agreement unless sooner terminated pursuant to Paragraph 5.
c. CAR ALLOWANCE. PhoneTel shall provide Pace with an automobile
and allowance substantially similar to officers of PhoneTel who are similarly
situated, but at a minimum shall provide Pace with an automobile allowance
equal to the amount of the lease payment associated with his present
automobile, per month during the term of this Agreement to be used for expenses
relating to his use of an automobile for business purposes, including, but not
limited to, maintenance, repairs and gasoline. This car allowance shall be paid
to Pace each month. PhoneTel shall provide Pace with a gasoline credit card or
cards in the name of PhoneTel which may be used for automobile expenses.
d. BONUS. PhoneTel shall pay Pace a guaranteed bonus of ten percent
(10%) of Pace's base salary for each of the two (2) twelve (12) month
employment periods contemplated by this Agreement. The bonus shall be paid to
Pace on the first day of the last month of each employment period.
Notwithstanding the foregoing, no bonus shall be due and owing if PhoneTel has
no earnings before interest, taxes, depreciation and amortization ("EBITDA").
EBITDA shall be determined in accordance with generally accepted accounting
principles. If PhoneTel's Board of Directors has establishes a bonus plan of
which Pace is an eligible participant by the date such bonus payment is due,
then Pace shall receive a bonus only if in accordance with the terms and
conditions of such plan. The Board of Directors may, in its sole and absolute
discretion, award a bonus to Pace even if none was due to be awarded or
increase an awarded bonus.
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4. REIMBURSEMENT FOR COMPANY EXPENSES. PhoneTel shall reimburse Pace
for any expense he reasonably incurs on behalf of PhoneTel's business or
pursuant to performance of his duties under this Agreement, including all
travel, meals and lodging. Reimbursements shall be made each month for the
prior month's expenses, provided that such expenses have been reasonably
substantiated and documented.
5. TERMINATION OF EMPLOYMENT.
a. TERMINATION WITH CAUSE. PhoneTel shall have the right to
terminate this Agreement, at any time, for cause (as defined below). In such
event, PhoneTel's only liability or obligation to Pace under this Agreement
shall be to pay Pace's base salary through the termination date and to
reimburse Pace for any and all outstanding expenses he incurred pursuant to
Paragraph 4 of this Agreement on or before the termination date. Upon such
termination with cause, Pace shall be subject to and bound by the covenant not
to compete set forth in Paragraph 6 provided PhoneTel pays those amounts set
forth in Paragraph 6(a). As used herein, the term "cause" shall mean any
violation of the covenants not to compete set forth in Paragraph 6,
intoxication or drug use while performing duties on behalf of PhoneTel or while
on PhoneTel's premises, gross negligence, fraud or dishonesty affecting
PhoneTel's business or funds.
b. TERMINATION WITHOUT CAUSE. If PhoneTel terminates Pace's
employment for any reason other than a reason listed in Paragraph 5(a) above,
PhoneTel shall give Pace thirty (30) days' prior written notice and shall
provide Pace with all compensation, as defined by Paragraph 3 hereof, including
bonus pro-rata to date of termination, during what would otherwise be the
remaining term of this Agreement, provided Pace signs a general release to
PhoneTel waiving any claims relating to his employment. Upon such termination
without cause, Pace shall be subject to and bound by the covenant not to
compete set forth in Paragraph 6, provided PhoneTel pays those amounts set
forth in Paragraph 6(a).
c. VOLUNTARY RESIGNATION. Pace shall have the right to terminate
this Agreement, at any time, upon fourteen (14) calendar days' prior written
notice to PhoneTel. In such event, PhoneTel's only liability or obligation to
Pace under the terms of this Agreement shall be to pay Pace his base salary
through the effective date of his termination, and, on such effective date, to
pay Pace for any unused vacation time accrued as of the effective termination
date and to reimburse Pace for any and all outstanding expenses he accrued
pursuant to Paragraph 4 of this Agreement on or before the effective
termination date. Upon such voluntary resignation, Pace shall be subject to
and bound by the covenant not to compete set forth in Paragraph 6 provided
PhoneTel pays those amounts set forth in Paragraph 6(a).
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d. TERMINATION POWER. The Chairman of the Board of Directors of
PhoneTel shall have the power, acting alone, to terminate this Agreement,
either with or without cause subject to the terms of this Section 5.
6. COVENANT NOT TO COMPETE. In consideration of the employment and
compensation paid by PhoneTel pursuant to this Agreement, Pace agrees that
during the term of employment set forth herein and for a period of one (1) year
after termination of Pace's employment with PhoneTel ("Non-Compete Period"),
regardless of how, when and why that employment ends, Pace shall not directly
or indirectly solicit, employ or interfere with PhoneTel's relationship with
any of its employees, customers, location lessees, or agents and shall not
engage in (as a principal, partner, shareholder, director, officer, agent,
employee, consultant or otherwise) or be financially interested in any business
which is involved in business activities which are the same as, similar to, or
in competition with business activities carried on by PhoneTel, or being
definitely planned by PhoneTel at the time of the termination of Pace's
employment, within the states in which PhoneTel is doing business at the time
of Pace's termination or at any time during the Non-Compete Period.
a. If the Non-Compete Period shall extend beyond the two (2)
year term of employment, PhoneTel shall pay Pace, in equal monthly
installments, an amount equal to: (i) the product of (A) the number of days by
which the Non-Compete Period extends beyond the two (2) year term of employment
multiplied by (B) the Non-Compete Compensation Base, divided by (ii) three
hundred sixty-five (365). For purposes of the foregoing, Non-Compete
Compensation Base shall be forty percent (40%) of Pace's annualized
compensation:
(i) of the current twelve (12) month period if the
covenant not to compete becomes effective due to the
termination or resignation of Pace; or
(ii) of the final twelve (12) month period if the covenant
not to compete becomes effective due to the natural
expiration of the term of this Agreement.
b. PhoneTel is permitted to release Pace from the provisions of
this covenant not to compete and avoid the payment of the amounts contemplated
in this Paragraph 6, provided such release is received by Pace in writing upon
termination or expiration of this Agreement.
7. RELOCATION. In consideration of the employment and compensation
paid by PhoneTel pursuant to this Agreement, Pace agrees that during the term
of employment, subject to the
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63
conditions set forth below, unless sooner terminated pursuant to Paragraph 5,
he will relocate to any location reasonably requested by PhoneTel or its
Chairman of the Board of Directors; provided that, Pace's job duties remain
substantially similar to the job for which he initially is employed or would be
considered a promotion. A reasonably requested location is one in which
PhoneTel is then conducting business.
a. EXPENSES. In consideration of the exercise of its right to
obligate Pace to relocate in order to perform his duties for PhoneTel, PhoneTel
shall assist Pace in the following manner:
(i) PhoneTel shall pay all of Pace's expenses associated with
the moving and storage of Pace's personal property and
shall pay all of his living expenses for the period, the
shorter of: (A) six (6) months from and after the date of
his relocation, or (B) the date on which Pace closes on
the sale of his primary residence; and
(ii) PhoneTel shall pay all of the expenses and commissions
associated with the sale of Pace's primary personal
residence. If Pace is unable to sell his primary personal
residence after six (6) months from the date of notice of
relocation, then, upon the sale of his primary personal
residence, PhoneTel shall pay Pace, the difference between
the net proceeds from the subsequent sale of such
residence and the appraised fair market value (as
determined by an appraiser selected and agreed to by Pace
and PhoneTel) as of the date six (6) months after his
relocation; provided, that such payment shall not exceed
Forty Thousand Dollars ($40,000.00).
b. NOTICE. PhoneTel shall provide Pace with at least six (6)
weeks prior written notice of its exercise of its right to obligate Pace to
relocate pursuant to the terms herein. Notwithstanding the preceding, PhoneTel
may not obligate Pace to relocate within the first six (6) months of the term of
employment contemplated by this Agreement.
8. INVESTMENT EXCEPTION. Notwithstanding anything herein to the
contrary, nothing in this Agreement is intended or shall be construed as
limiting Pace's right as an investor to hold or to acquire the investment
securities of any business entity that is registered on a national securities
exchange or admitted to trading privileges thereon or actively traded on a
generally recognized over-the-counter market, so long as Pace's interest of any
such business entity constitutes less than five percent (5%)
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64
of the ownership therein; provided, that, Pace's actions or holdings do not
violate the rules or regulations of the Securities and Exchange Act of 1933 and
the Securities and Exchange Commission.
9. SENIORITY. For purposes of determining Pace's seniority for
fringe benefits (other than vacation), he shall be entitled to tack his term of
employment by WCI which commenced on February 6, 1987, and will extend through
the date the merger is consummated.
10. DEATH OR DISABILITY OF EMPLOYEE. Upon Pace's death or disability
(as defined herein), all obligations of PhoneTel to make payments under
Paragraphs 3, 5 or 6 shall cease and terminate in the case of death, as of the
date of Pace's death, and in the case of disability, on the date Pace is
disabled in accordance with the following. Pace shall be deemed to be disabled
if he shall, as a result of such disability, fail to perform the duties, as
required hereunder for any three (3) months during a consecutive four (4) month
period.
11. AMENDMENTS. No amendment or modification of the terms or
conditions of this Agreement shall be valid unless in writing and signed by
both parties.
12. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding on PhoneTel, its successors and assigns, and any corporation
with which PhoneTel may merge or consolidate or to which PhoneTel may sell all
or substantially all of its business and assets, and shall inure to the benefit
of and be binding on Pace, his executors, administrators, heirs and personal
and legal representatives. Since Pace's duties and services hereunder are
special, personal and unique in nature, Pace may not transfer, sell or
otherwise assign his obligations under this Agreement.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14. SEVERABILITY. In the event that any of the terms, conditions or
provisions of this Agreement are held to be illegal, invalid or unenforceable
by any court of competent jurisdiction, the legality, validity and
enforceability of the remaining terms, conditions or provisions shall not be
affected thereby. Furthermore, in lieu of such illegal, invalid or
unenforceable provision, there shall be added automatically as a part of this
Agreement a provision as similar in its terms as possible to be legal, valid
and enforceable.
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65
15. REMEDIES UPON BREACH. In the event of any breach of this
Agreement by either party, the non-breaching party shall be entitled, if it so
elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either in law or in equity, to enjoin the breaching party from
violating any of the terms of this Agreement, to enforce specific performance
of any of the terms of this Agreement, and to obtain damages, or any of them,
but nothing herein contained shall be construed to prevent such remedy or
combination of remedies as the non-breaching party may elect to invoke. The
failure of the non-breaching party promptly to institute legal action upon any
breach of this Agreement shall not constitute a waiver of that or any other
breach, and shall not prevent later strict enforcement of the terms of this
Agreement.
16. CHOICE OF LAW. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Missouri.
17. NOTICES. All notices and communications required under this
Agreement shall be in writing and shall be deemed given if delivered personally
or sent by certified mail, return receipt requested, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice which shall be deemed effective when received):
(a) To PhoneTel:
000 Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Mr. Xxxxx Xxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: N.J. Terris, Esq.
(b) To Pace:
Mr. Xxxx Xxxx
00000 Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
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with a copy to:
Xxxx X. Xxxxxxxx
Xxxxxxxxxx, Xxxxxx & Xxxxxxxxx, P.C.
000 X. Xxxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
18. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties, and supersedes any other prior agreement or undertaking,
written or oral, between the parties with respect to the subject matter hereof
and thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
PHONETEL PACE
By:
--------------------------- --------------------------
Xxxx Xxxx
Its:
---------------------------
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EXHIBIT I
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") made and entered into this
22nd day of September, 1995, by and between PhoneTel Technologies, Inc., an
Ohio corporation (hereinafter "PhoneTel"), and Xxxxx Xxxxxx (hereinafter
"Xxxxxx").
WHEREAS, Xxxxxx is currently employed by World Communications, Inc., a
Missouri corporation (hereinafter "WCI"), as Vice President and Secretary of
the Corporation, and is a valuable and key employee; and
WHEREAS, PhoneTel and WCI are both parties to that certain Agreement
and Plan of Merger executed of even date herewith; and
WHEREAS, PhoneTel desires to retain Xxxxxx'x experience and to secure
for itself the continued services and expertise of Xxxxxx;
NOW, THEREFORE, in consideration of the premises and agreements
hereinafter contained, the parties agree as follows:
1. EMPLOYMENT. PhoneTel agrees to employ Xxxxxx as Vice-President
of PhoneTel, and Xxxxxx hereby accepts such employment, upon the terms and
conditions hereinafter set forth. Xxxxxx shall perform, to the best of her
abilities, the duties customarily performed by persons in the position in which
she is engaged and such other duties as PhoneTel's Board of Directors or its
delegate may reasonably assign to Xxxxxx from time to time. Xxxxxx shall devote
her full business time and efforts to rendering such services.
2. TERM OF EMPLOYMENT. The term of Xxxxxx'x employment shall
commence on the day and year first written above, and continue for twenty-four
(24) months unless terminated sooner pursuant to Paragraph 5 of this Agreement.
3. COMPENSATION.
a. BASE SALARY. During the first twelve (12) months of this
Agreement, PhoneTel shall pay Xxxxxx a base salary of Sixty-five Thousand
Dollars ($65,000.00), less all required withholdings. During the second twelve
(12) months of this Agreement, PhoneTel shall pay Xxxxxx a base salary of
Seventy Thousand Dollars ($70,000.00), less all required withholdings. Xxxxxx'x
annual salary shall be paid in equal installments on a regular basis consistent
with PhoneTel's payroll practices and procedures for similarly compensated
employees. If Xxxxxx is relocated pursuant to Paragraph 7 hereof, Xxxxxx'x
base salary shall be increased proportionately for any increase in the cost of
living of the area to which Xxxxxx is relocated over St. Louis as determined by
the current publication of "Places Rated" or
68
other nationally recognized publication. The first twelve (12) month period of
this Agreement begins on the day and year first above written and ends on that
same date twelve (12) months later. The second twelve (12) month period of
this Agreement begins on the day following the expiration of the first twelve
(12) month period of this Agreement and ends on that same date twelve (12)
months later.
b. FRINGE BENEFITS. PhoneTel shall provide Xxxxxx with any and all
fringe benefits, including, but not limited to, life insurance, medical
insurance, and pension and profit sharing privileges, if any, which are
commensurate with and which PhoneTel provides to similarly situated employees.
Xxxxxx shall be entitled to three (3) weeks of vacation per twelve (12) month
period of the term of this Agreement, but shall not use more than two (2) weeks
of such vacation consecutively. PhoneTel further agrees to maintain Xxxxxx'x
membership with the Missouri Athletic Club, St. Louis, Missouri, at PhoneTel's
expense. During the term of her employment, PhoneTel shall provide Xxxxxx, at
PhoneTel's sole expense, a mobile telephone. Such benefits are to commence on
the date and year first above written and shall continue throughout the term of
this Agreement unless sooner terminated pursuant to Paragraph 5.
c. CAR ALLOWANCE. PhoneTel shall provide Xxxxxx with an automobile
and allowance substantially similar to officers of PhoneTel who are similarly
situated, but at a minimum shall provide Xxxxxx with an automobile allowance of
Three Hundred Ninety Dollars ($390.00) per month during the term of this
Agreement for all expenses relating to her use of an automobile, including, but
not limited to, maintenance, repairs and gasoline. This car allowance shall be
paid to Xxxxxx each month. PhoneTel shall provide Xxxxxx with a gasoline
credit card or cards in the name of PhoneTel which may be used for automobile
expenses.
d. BONUS. PhoneTel shall pay Xxxxxx a guaranteed bonus of ten
percent (10%) of Xxxxxx'x base salary for each of the two (2) twelve (12) month
employment periods contemplated by this Agreement. The bonus shall be paid to
Xxxxxx on the first day of the last month of each employment period.
Notwithstanding the foregoing, no bonus shall be due and owing if PhoneTel has
no earnings before interest, taxes, depreciation and amortization ("EBITDA").
EBITDA shall be determined in accordance with generally accepted accounting
principles. If PhoneTel's Board of Directors establishes a bonus plan of which
Xxxxxx is an eligible participant by the date such bonus payment is due, then
Xxxxxx shall receive a bonus only if in accordance with the terms and
conditions of such plan. The Board of Directors may, in its sole and absolute
discretion, award a bonus to Xxxxxx even if none was due to be awarded or
increase an awarded bonus.
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4. REIMBURSEMENT FOR COMPANY EXPENSES. PhoneTel shall reimburse
Xxxxxx for any expense she reasonably incurs on behalf of PhoneTel's business
or pursuant to performance of her duties under this Agreement, including all
meals, travel and lodging. Reimbursements shall be made each month for the
prior month's expenses, provided that such expenses have been reasonably
substantiated and documented.
5. TERMINATION OF EMPLOYMENT.
-------------------------
a. TERMINATION WITH CAUSE. PhoneTel shall have the right to
terminate this Agreement, at any time, for cause (as defined below). In such
event, PhoneTel's only liability or obligation to Xxxxxx under this Agreement
shall be to pay Xxxxxx'x base salary through the termination date and to
reimburse Xxxxxx for any and all outstanding expenses she incurred pursuant to
Paragraph 4 of this Agreement on or before the termination date. Upon such
termination with cause, Xxxxxx shall be subject to and bound by the covenant
not to compete set forth in Paragraph 6 provided PhoneTel pays those amounts
set forth in Paragraph 6(a). As used herein, the term "cause" shall mean any
violation of the covenants not to compete set forth in Paragraph 6,
intoxication or drug use while performing duties on behalf of PhoneTel or while
on PhoneTel's premises, gross negligence, fraud or dishonesty affecting
PhoneTel's business or funds.
b. TERMINATION WITHOUT CAUSE. If PhoneTel terminates Xxxxxx'x
employment for any reason other than a reason listed in Paragraph 5(a) above,
PhoneTel shall give Xxxxxx thirty (30) days prior written notice and shall
provide Xxxxxx with all compensation, as defined by Paragraph 3 hereof,
including bonus pro-rata to date of termination, during what would otherwise be
the remaining term of this Agreement, provided Xxxxxx signs a general release
to PhoneTel waiving any claims related to her employment. Upon such
termination without cause, Xxxxxx shall be subject to and bound by the covenant
not to compete set forth in Paragraph 6, provided PhoneTel pays those amounts
set forth in Paragraph 6(a).
c. VOLUNTARY RESIGNATION. Xxxxxx shall have the right to
terminate this Agreement, at any time, upon fourteen (14) calendar days' prior
written notice to PhoneTel. In such event, PhoneTel's only liability or
obligation to Xxxxxx under the terms of this Agreement shall be to pay Xxxxxx
her base salary through the effective date of her termination date and, on such
effective date, to pay Xxxxxx for any unused vacation time accrued as of the
effective termination date and to reimburse Xxxxxx for any and all outstanding
expenses she accrued pursuant to Paragraph 4 of this Agreement on or before the
effective termination date. Upon such voluntary resignation, Xxxxxx shall be
subject to and bound by the covenant not to compete set forth
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70
in Paragraph 6 provided PhoneTel pays those amounts set forth in Paragraph 6(a).
d. TERMINATION POWER. The Chairman of the Board of Directors of
PhoneTel shall have the power, acting alone, to terminate this Agreement,
either with or without cause subject to the terms of this Section 5.
6. COVENANT NOT TO COMPETE. In consideration of the employment and
compensation paid by PhoneTel pursuant to this Agreement, Xxxxxx agrees that
during the term of employment set forth herein and for a period of one (1) year
after termination of Xxxxxx'x employment with PhoneTel (the "Non-Compete
Period"), regardless of how, when and why that employment ends, Xxxxxx shall
not directly or indirectly solicit, employ or interfere with PhoneTel's
relationship with any of its employees, customers, location lessees, or agents
and shall not engage in (as a principal, partner, shareholder, director,
officer, agent, employee, consultant or otherwise) or be financially interested
in any business which is involved in business activities which are the same as,
similar to, or in competition with business activities carried on by PhoneTel,
or being definitely planned by PhoneTel at the time of the termination of
Xxxxxx'x employment, within the states in which PhoneTel is doing business at
the time of Xxxxxx'x termination or at any time during the Non-Compete Period.
Notwithstanding the foregoing, Xxxxxx is expressly permitted to maintain,
operate and own Missouri Telephone and Telegraph, a Missouri corporation,
provided it owns fifty (50) phones or fewer.
a. If the Non-Compete Period shall extend beyond the two (2) year
term of employment, PhoneTel shall pay Xxxxxx, in equal monthly installments,
an amount equal to: (i) the product of (A) the number of days by which the
Non-Compete Period extends beyond the two (2) year term of employment
multiplied by (B) the Non-Compete Compensation Base, divided by (ii) three
hundred sixty-five (365). For purposes of the foregoing, Non-Compete
Compensation Base shall be forty percent (40%) of Xxxxxx'x annualized
compensation:
(i) of the current twelve (12) month period if the covenant
not to compete becomes effective due to the termination or
resignation of Xxxxxx; or
(ii) of the final twelve (12) month period if the covenant
not to compete becomes effective due to the natural
expiration of the term of this Agreement.
b. PhoneTel is permitted to release Xxxxxx from the provisions of
this covenant not to compete and avoid the payment of the amounts contemplated
in this Paragraph 6, provided such
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71
release is received by Xxxxxx in writing upon termination or expiration of this
Agreement.
7. RELOCATION. In consideration of the employment and compensation
paid by PhoneTel pursuant to this Agreement, Xxxxxx agrees that during the term
of employment, subject to the conditions set forth below, unless sooner
terminated pursuant to Xxxxxxxxx 0, Xxxxxx will relocate to any location
reasonably requested by PhoneTel or its Chairman of the Board of Directors;
provided that, Xxxxxx'x job duties remain substantially similar to the job for
which she initially is employed or would be considered a promotion. A
reasonably requested location is one in which PhoneTel is then conducting
business.
a. EXPENSES. In consideration of the exercise of its right to
obligate Xxxxxx to relocate in order to perform her duties for PhoneTel,
PhoneTel shall assist Xxxxxx in the following manner:
(i) PhoneTel shall pay all of Xxxxxx'x expenses associated
with the moving and storage of Xxxxxx'x personal property
and shall pay all of her living expenses for the period,
the shorter of: (A) six (6) months from and after the date
of her relocation, or (B) the date on which Xxxxxx closes
on the sale of her primary residence; and
(ii) PhoneTel shall pay all of the expenses and commissions
associated with the sale of Xxxxxx'x primary personal
residence. If Xxxxxx is unable to sell her primary
personal residence after six (6) months from the date
of notice of relocation, then, upon the sale of her
personal residence, PhoneTel shall pay Xxxxxx the
difference between the net proceeds from the subsequent
sale of such residence and the appraised fair market value
(as determined by an appraiser selected and agreed to by
Xxxxxx and PhoneTel) as of the date six (6) months after
her relocation; provided, that such payment shall not
exceed Forty Thousand Dollars ($40,000.00).
b. NOTICE. PhoneTel shall provide Xxxxxx with at least six (6)
weeks prior written notice of its exercise of its right to obligate Xxxxxx to
relocate pursuant to the terms herein. Notwithstanding the preceding, PhoneTel
may not obligate Xxxxxx to relocate within the first six (6) months of the term
of employment contemplated by this Agreement.
5
72
8. INVESTMENT EXCEPTION. Notwithstanding anything herein to the
contrary, nothing in this Agreement is intended or shall be construed as
limiting Xxxxxx'x right as an investor to hold or to acquire the investment
securities of any business entity that is registered on a national securities
exchange or admitted to trading privileges thereon or actively traded on a
generally recognized over-the-counter market, so long as Xxxxxx'x interest of
any such business entity constitutes less than five percent (5%) of the
ownership therein; provided, that Xxxxxx'x actions or holdings do not violate
the rules or regulations of the Securities and Exchange Act of 1933 and the
Securities and Exchange Commission.
9. SENIORITY. For purposes of determining Xxxxxx'x seniority for
fringe benefits (other than vacation), she shall be entitled to tack her term
of employment by WCI which commenced on August 6, 1986, and will extend through
the date the merger is consummated.
10. DEATH OR DISABILITY OF EMPLOYEE. Upon Xxxxxx'x death or
disability (as defined herein), all obligations of PhoneTel to make payments
under Paragraphs 3, 5 or 6 shall cease and terminate in the case of death, as
of the date of Xxxxxx'x death, and in the case of disability, on the date
Xxxxxx is disabled in accordance with the following. Xxxxxx shall be deemed to
be disabled if she shall, as a result of such disability, fail to perform the
duties, as required hereunder for any three (3) months during a consecutive
four (4) month period.
11. AMENDMENTS. No amendment or modification of the terms or
conditions of this Agreement shall be valid unless in writing and signed by
both parties.
12. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding on PhoneTel, its successors and assigns, and any corporation
with which PhoneTel may merge or consolidate or to which PhoneTel may sell all
or substantially all of its business and assets, and shall inure to the benefit
of and be binding on Xxxxxx, her executors, administrators, heirs and personal
and legal representatives. Since Xxxxxx'x duties and services hereunder are
special, personal and unique in nature, Xxxxxx may not transfer, sell or
otherwise assign her obligations under this Agreement.
13. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
14. SEVERABILITY. In the event that any of the terms, conditions or
provisions of this Agreement are held to be illegal, invalid or unenforceable
by any court of competent
6
73
jurisdiction, the legality, validity and enforceability of the remaining terms,
conditions or provisions shall not be affected thereby. Furthermore, in lieu
of such illegal, invalid or unenforceable provision, there shall be added
automatically as a part of this Agreement a provision as similar in its terms
as possible to be legal, valid and enforceable.
15. REMEDIES UPON BREACH. In the event of any breach of this
Agreement by either party, the non-breaching party shall be entitled, if it so
elects, to institute and prosecute proceedings in any court of competent
jurisdiction, either in law or in equity, to enjoin the breaching party from
violating any of the terms of this Agreement, to enforce specific performance
of any of the terms of this Agreement, and to obtain damages, or any of them,
but nothing herein contained shall be construed to prevent such remedy or
combination of remedies as the non-breaching party may elect to invoke. The
failure of the non-breaching party promptly to institute legal action upon any
breach of this Agreement shall not constitute a waiver of that or any other
breach, and shall not prevent later strict enforcement of the terms of this
Agreement.
16. CHOICE OF LAW. This Agreement shall be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Missouri.
17. NOTICES. All notices and communications required under this
Agreement shall be in writing and shall be deemed given if delivered personally
or sent by certified mail, return receipt requested, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice which shall be deemed effective when received):
(a) To PhoneTel:
000 Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Mr. Xxxxx Xxxx
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: N.J. Terris, Esq.
(b) To Xxxxxx:
Ms. Xxxxx Xxxxxx
00 Xxxxxx Xxxxx Xxxxx
Xx. Xxxxxx, Xxxxxxxx 00000
7
74
With a copy to:
Xxxx X. Xxxxxxxx, Esq.
Xxxxxxxxxx, Xxxxxx & Xxxxxxxxx, P.C.
000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
18. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties, and supersedes any other prior agreement or undertaking,
written or oral, between the parties with respect to the subject matter hereof
and thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
PHONETEL XXXXXX
By:
--------------------------- -----------------------------
Its: Xxxxx Xxxxxx
---------------------------
8
75
EXHIBIT J
SECURITY AGREEMENT
------------------
THIS SECURITY AGREEMENT is made this 22nd day of September, 1995, by
and between PHONETEL II, INC. ("Buyer"), a Missouri corporation, and WCI II,
Inc. ("WCI II"), a Missouri corporation.
WHEREAS, PhoneTel Technologies, Inc. ("PhoneTel"), Buyer and World
Communications, Inc. ("WCI") are parties to that certain Agreement and Plan of
Merger ("Merger Agreement") whereby WCI shall be merged into and with Buyer in
exchange for capital stock of PhoneTel (the "Merger"); and
WHEREAS, prior to the Merger, Buyer borrowed from The Boatmen's
National Bank of St. Louis, N.A. ("Boatmen's") Two Million Four Hundred
Thousand Dollars ($2,400,000.00) evidenced by a Term Note and Loan Agreement by
and between Buyer and Boatmen's which is secured pursuant to the terms of a
Security Agreement also by and between Buyer and Boatmen's, all of which are
dated as of September 22, 1995 (hereinafter referred to as the "Boatmen's
Indebtedness") (the Term Note, Loan Agreement and Security Agreement are
hereinafter referred to as the "Boatmen's Loan Documents"); and
WHEREAS, prior to the Merger, certain shareholders of WCI guaranteed
the Boatmen's Indebtedness which will continue after the Merger, to secure the
financial obligations of Buyer, the surviving entity; and
WHEREAS, to secure Buyer's obligation to pay the Boatmen's Indebtedness
and to induce the shareholders of WCI to approve the Merger, Buyer has agreed
to grant WCI II (a Missouri corporation formed by all of the shareholders of
WCI for purposes of entering
72
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into and enforcing rights set forth in this Security Agreement, if necessary)
a security interest in certain assets of Buyer.
NOW, THEREFORE, Buyer and WCI II agree as follows:
1. GRANT OF SECURITY INTEREST. To secure payment by Buyer of the
Boatmen's Indebtedness, Buyer grants to WCI II a security interest in and to
all of Buyer's right, title and interest in and to each of the following,
wherever located and whether now or hereafter existing or now owned or
hereafter acquired or arising (the "Collateral"):
a. 1,500 pay telephones installations listed by serial number,
location, and telephone number as set forth in Exhibit A attached hereto, and
all royalty agreements, leases, contracts or location agreements, accounts
related to such pay telephones, agreements for telephone billing and collecting
services or the provision of operator services, agreements for the provision of
local or interstate telecommunications services and facilities, and all other
contracts and agreements entered into or assigned to Borrower from time to time
related to such pay telephones; and
b. All computer hardware and software used by WCI in connection
with the operation of pay telephones and which were used by WCI in the
operation of its business immediately prior to the Merger; and
c. All cash or non-cash proceeds of the foregoing, all proceeds from
the issuance on any of the foregoing, all additions and access ions to and
replacements and substitutions of
2
77
any of the foregoing, everything that becomes (or is held for the purpose of
being) affixed to or installed in any of the foregoing, and all products,
income and profits of or from the foregoing.
2. BUYER'S WARRANTIES AND COVENANTS. Buyer warrants and covenants:
a. Buyer owns, or after the Merger will own, the Collateral free
of all liens, security interests and encumbrances other than a first priority
lien in favor of Boatmen's, and will defend title to the same against the
claims and demands of all persons except as expressly provided herein.
b. Buyer will insure the Collateral against such risks and in
such amounts as WCI II may designate with insurance policies acceptable to
WCI II and payable to Boatmen's, and WCI II as their interests may appear and
shall furnish WCI Il with copies of such insurance policies or with certificates
evidencing such insurance policies.
c. Buyer will preserve the Collateral and keep it in good
condition and shall allow WCI II to inspect any part or all of the Collateral.
d. Buyer shall not, except in the ordinary course of its
business, sell or dispose of the Collateral or subject it to any unpaid charge
or any subsequent interest of a third person unless WCI II gives its prior
written consent.
e. WCI II may, at its option, discharge taxes, liens, security
interests, or other encumbrances on the Collateral, and
3
78
may pay for the repair of any damage to the collateral, the maintenance and
preservation thereof, and for insurance thereon, and upon so doing, Buyer shall
on demand reimburse WCI II for any payment 50 made. The payments advanced
shall bear interest at twelve percent (12%) per annum from the date of payment
until reimbursement and shall be secured by this Security Agreement.
f. The Collateral covered by this Agreement is to be used by
Buyer for business purposes.
g. Buyers principal place of business is at 00000 Xxxxxxx Xxxx
Xxxx, Xx. Xxxxx, Xxxxxxxx 00000. Buyer shall immediately notify WCI II of any
change of address of its principle place of business.
h. Buyer agrees to execute and deliver to WCI II at any time and
from time to time hereafter at the request of WCI II, all agreements,
instruments, financing statements and other documents that WCI II shall
reasonably request, in a form and substance reasonably acceptable to WCI Il, to
perfect and maintain the perfection of the security interest of WCI II in the
Collateral.
i. Buyer agrees that it shall give WCI II notice, in accordance
with paragraph 8 of this Agreement, of any notice Boatmen's gives to Buyer
pursuant to the Boatmen's Loan Documents and any notice Buyer gives Boatmen's
pursuant thereto.
3. EVENTS OF DEFAULT. Buyer further warrants and covenants that the
following shall be events of default under this Security Agreement ("Events of
Default"):
4
79
a. Any event which constitutes an event of default as defined
in, and pursuant to, the Boatmen's Loan Documents.
b. Reasonable determination by WCI II that any material warranty
or representation herein made was false when made or no longer continues to be
true.
4. REMEDIES. Upon the occurrence of an Event of Default and at any
time thereafter, WCI II may exercise any and all rights and remedies provided
by the Uniform Commercial Code as well as all other rights and remedies
possessed by WCI II. Buyer shall reimburse WCI II for all expenses in
connection with the retaking, holding, preparing for sale, selling and the like
of the Collateral, including the reasonable attorneys fees and legal expenses
of WCI II. Any notification of sale or other disposition of the Collateral
required to be given by WCI II will be sufficient if given personally, or
mailed by certified mail, not less than five (5) days prior to the day on which
such sale or other disposition will be made, and such notification shall be
deemed reasonable notice. Upon the sale or disposition of the Collateral, the
proceeds from such sale or disposition shall be distributed as follows:
(a) First, there shall be paid, the reasonable expenses of
retaking, holding, preparing for sale or lease, selling or leasing and the like
and, the reasonable attorneys' fees and legal expenses incurred by WCI II;
(b) Second, there shall be paid, the Boatmen's Indebtedness;
5
80
(c) Third, there shall be paid any indebtedness secured by any
subordinate security interest in the Collateral if written notification of
demand therefor is received before distribution of the proceeds is completed.
If requested by the WCI II, the holder of a subordinate security interest must
seasonably furnish reasonable proof of his interest, and unless he does so, WCI
II need not comply with his demand.
(d) Finally, if there shall remain any proceeds after
satisfaction of the above items, WCI II shall remit to Buyer any surplus, and,
unless otherwise agreed, Buyer shall be liable for any deficiency.
5. NON-WAIVER. No waiver by WCI II of any default or Event of
Default shall operate as a waiver of any other default.
6. TERMINATION. Upon payment in full of the obligation to
Boatmen's, this Security Agreement shall terminate and all rights to the
Collateral shall revert to the Buyer. Upon any such termination, WCI II will
execute and deliver to the Buyer such documents as the Buyer shall reasonably
request as evidence of termination.
7. BINDING. This Security Agreement shall be binding upon Buyer's
successors and assigns.
8. NOTICE. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given upon receipt if personally delivered, upon
confirmed transmission if via telecopier, five (5) days from date of mailing if
deposited
6
81
in the United States mails, certified mail, return receipt requested, or the
next day, if via a nationally recognized delivery service for next day
delivery, addressed as follows:
To Buyer: PhoneTel II, Inc.
000 Xxxxxxx Xxxxxx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
ATTN: Xx. Xxxxxx X. Xxxx
with a copy to: Skadden, Arps, Slate,
Xxxxxxx & Xxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ATTN: N.J. Terris, Esq.
If to WCI II: WCI II
00000 Xxxxxxx Xxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
ATTN: Xxxxxx Xxxxxxxxx
With a copy to: Xxxxxxxxxx, Xxxxxx & Xxxxxxxxx, P.C.
000 X. Xxxxxxx Xxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000-0000
ATTN: Xxxx X. Xxxxxxxx, Esq.
Any party may alter the address to which communications or copies are
to be sent by giving notice of such change of address in conformity with the
provisions of this Paragraph or the giving of notice.
9. CONTROLLING LAW. This Agreement and all questions relating to
its validity, interpretation, performance and enforcement, shall be governed by
and construed in accordance with the laws of the State of Missouri.
7
82
IN WITNESS WHEREOF, the parties have caused this Security Agreement to be
executed through duly authorized corporate action on the day and year first
above written.
PHONETEL II, INC.
By:_____________________________
Title:__________________________
WCI II
By:______________________________
Title: __________________________
8
83
EXHIBIT K
STATE OF MISSOURI
[STATE SEAL]
XXXXXXX XXXXXXXX XXXX
SECRETARY OF STATE
CORPORATION DIVISION
CERTIFICATE OF CORPORATE RECORDS
WORLD COMMUNICATIONS, INC.
I, XXXXXXX XXXXXXXX XXXX, SECRETARY OF STATE OF THE STATE OF MISSOURI AND
KEEPER OF THE GREAT SEAL THEREOF, DO HEREBY CERTIFY THAT THE ANNEXED PAGES
CONTAIN A FULL, TRUE AND COMPLETE COPY OF THE ORIGINAL DOCUMENTS ON FILE AND OF
RECORD IN THIS OFFICE.
IN TESTIMONY WHEREOF, I HAVE SET MY
HAND AND IMPRINTED THE GREAT SEAL OF [STATE SEAL]
THE STATE OF MISSOURI, ON THIS, THE
24TH DAY OF AUGUST, 1995.
Xxxxxxx XxXxxxxx Xxxx
---------------------
Secreatry of State
84
EXHIBIT L
ARTICLES OF INCORPORATION
OF
WORLD COMMUNICATIONS, INC.
The undersigned, being a natural person of the age of twenty-one (21)
years or more, for the purpose of forming a corporation under The General
Business and Corporation Law of Missouri, hereby adopts the following Articles
of Incorporation:
ARTICLE I
---------
The name of the corporation is:
WORLD COMMUNICATIONS, INC.
ARTICLE II
----------
The address of its initial registered office in the State of Missouri
is: 0000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xx. Xxxxx, Xxxxxxxx 00000, and the name
of its initial registered agent at such address is: Xxxxxx Xxxxxxxxx.
ARTICLE III
-----------
The aggregate number of shares which the corporation shall have
authority to issue shall be one hundred thousand (100,000), all of which shares
shall be common shares of the par value of One ($1.00) Dollar each, amounting
in the aggregate to One Hundred Thousand ($100,000.00) Dollars.
ARTICLE IV
----------
The name and place of residence of the incorporator is as follows:
Name Address
---- -------
Xxxx X. Xxxxxxxxxx 0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
ARTICLE V
---------
The number of Directors to constitute the Board of Directors shall be
three (3).
ARTICLE VI
----------
The corporation shall have perpetual existence.
ARTICLE VII
-----------
The corporation is formed for the following purposes:
85
(a) To buy, sell, lease, distribute or otherwise deal in communication
and electronic devices of every type and description.
(b) To buy, acquire, produce, hold, and dispose of in any manner all
kinds of personal property, and to buy, sell, hold, own, lease, or otherwise
dispose of real property.
(c) To enter into, make, perform and carry out contracts of every kind
and description with any firm, person, partnership, corporation, or
association, and to negotiate loans whether secured by real estate or an
interest therein or not, and to engage in the buying, selling, holding, or
otherwise dealing in notes and other negotiable instruments.
(d) In general, to carry on any lawful business whatsoever which is
calculated directly or indirectly to promote the interest of the corporation
or to enhance the value of its property; and to do each and every other thing
suitable or proper for the accomplishment of any of the purposes or the
attainment of any one or more of the objectives herein-above enumerated, or
which at any time shall appear conducive to or expedient for the protection or
benefit of this corporation.
(e) To possess and enjoy all rights and powers which now, or at any
time hereafter, may be granted to or exercised by a corporation of this
character.
(f) In general, to carry on any business which is lawful and proper
for a corporation organized and existing under The General and Business
Corporation Law of Missouri.
IN WITNESS WHEREOF, these Articles of Incorporation have been signed
this 4th day of August, 1986.
Xxxx X. Xxxxxxxxxx
---------------------------
Xxxx X. Xxxxxxxxxx
-2-
86
STATE OF MISSOURI )
) SS.
COUNTY OF ST. LOUIS )
Before me on the 4th day of August, 1986, personally appeared Xxxx X.
Xxxxxxxxxx, who, being by me first duly sworn, declared that he is the person
who signed the foregoing document as incorporator and that the statements
contained therein are true.
/s/ Xxxxxx Xxxxxxxxx
----------------------------
Notary Public
My term expires:
XXXXXX XXXXXXXXX
NOTARY PUBLIC, STATE OF MISSOURI
MY COMMISSION EXPIRES JAN. 21, 1983
ST. LOUIS COUNTY
FILED AND CERTIFICATE OF
INCORPORATION ISSUED
AUG 6 1986
/s/ Xxx X. Xxxxx
-3-
87
No. 00292002
STATE OF MISSOURI
XXX X. XXXXX, Secretary of State
CORPORATION DIVISION
Certificate of Amendment
WORLD COMMUNICATIONS, INC.
WHEREAS, -----------------------------------------------------------------
a corporation organized under The General and Business Corporation Law has
delivered to me a Certificate of Amendment of its Articles of Incorporation
and has in all respects complied with the requirements of law governing the
amendment of Articles of Incorporation under The General and Business
Corporation Law.
NOW, THEREFORE, I, XXX X. XXXXX. Secretary of State of the State of Missouri,
do hereby certify that I have filed said Certificate of Amendment as provided
by law, and that the Articles of Incorporation of said corporation are amended
in accordance therewith.
[STATE SEAL] IN TESTIMONY WHEREOF, I hereunto set my
hand and affix the GREAT SEAL of the
State of Missouri. Done at the City of
Jefferson, this 25th day of January, 1988.
---- -------------
XXX X. XXXXX
-------------------------------
Secretary of State
Fee $20.00
00
XXXXX XX XXXXXXXX Xxxxxx xx Xxxxxxxxx xx Xxxxx
XXX X. XXXXX. Secretary of State
Amendment of Articles of Incorporation
(To be submitted in duplicate by an attorney)
XXXXXXXXX XXX X. XXXXX
SECRETARY OF STATE
STATE OF MISSOURI
X.X. XXX 000
XXXXXXXXX XXXX, XX 00000
Pursuant to the provisions of The General and Business Corporation Law of
Missouri, the undersigned Corporation certifies the following:
1. The present name of the Corporation is World Communications, Inc.
------------------------------------
The name under which it was originally organized was World Communications, Inc.
-------------------------
2. An amendment to the Corporation's Articles of Incorporation was adopted by
the shareholders on November 12th, 1987.
--------------------
3. Article Number III is amended to read as follows:
-----
The aggregate number of shares which the corporation shall have authority
to issue shall be Three Hundred Thousand (300,000), all of which shares
shall be common shares of the par value 33.33-1/3 cents each, amounting in
the aggregate to $100,000.00.
89
CERTIFIED COPY OF CORPORATE RESOLUTION
RESOLVED, that the following named persons be, and
they hereby are, elected to the offices set forth opposite
their respective names below, to serve until the next
annual meeting of the Board of Directors of the corporation
or until their successors are duly elected and shall
qualify:
Chairman of the Board
and Chief Executive Officer Xxxxxx Xxxxxxxxx
President and Chief
Operating Officer Xxxx Xxxx
Vice President Xxxxx Xxxxxx
Secretary Xxxxx Xxxxxx
Treasurer Xxxxxx Xxxxxxxxx
The undersigned, Xxxxx Xxxxxx, hereby certifies that she is
the Secretary of World Communications, Inc., a Missouri
corporation, and that the above is a true and correct copy of a
resolution duly adopted by the Board of Directors of said
corporation on April 22, 1987. The undersigned further
certifies that said resolution is still in full force and effect
as of the date hereof.
Executed this 14th day of December, 1987.
----
Xxxxx Xxxxxx
------------------------
Xxxxx Xxxxxx, Secretary
World Communications
FILED
STATE OF MISSOURI )
) SS. JAN 25 1988
COUNTY OF ST. LOUIS )
Xxx X. Xxxxx
Subscribed and sworn to before me this 14th day of December, 1987.
/s/ Xxxxxx Xxxxxxxxx
---------------------------
Notary Public
My term expires:
XXXXXX XXXXXXXXX
NOTARY PUBLIC, STATE OF MISSOURI
MY COMMISSION EXPIRES JAN. 21, 1983
ST. LOUIS COUNTY
90
4. Of the Five Hundred (500) shares outstanding, Five Hundred (500) of such
shares were entitled to vote on such amendment.
The number of outstanding shares of any class entitled to vote thereon as a
class were as follows:
Class Number of Outstanding Shares
----- ----------------------------
500 common 500 common
5. The number of shares voted for and against the amendment was as follows:
Class No. Voted For No. Voted Against
----- ------------- -----------------
500 common 500 0
6. If the amendment changed the number or par value of authorized shares
having a par value, the amount in dollars of authorized shares having a
par value as changed is: $100,000.00 (no change in aggregate amount).
If the amendment changed the number of authorized shares without par value,
the authorized number of shares without par value as changed and the
consideration proposed to be received for such increased authorized shares
without par value as are to be presently issued are:
N/A
7. If the amendment provides for an exchange, reclassification, or
cancellation of issued shares, or a reduction of the number of authorized
shares of any class below the number of issued shares of that class, the
following is a statement of the manner in which such reduction shall be
effected:
N/A
91
IN WITNESS WHEREOF, the undersigned, Xxxxxx Xxxxxxxxx, Pres., Chairman of
the Board has executed this instrument and its Secretary has affixed its
corporate seal hereto and attested said seal on the 12th day of November, 1987.
PLACE
CORPORATE SEAL
HERE.
(IF NO SEAL, STATE "NONE")
WORLD COMMUNICATIONS, INC.
---------------------------------
Name of Corporation
ATTEST:
/s/ Xxxxx Xxxxxx By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------- -----------------------------
Secretary
Xxxxx Xxxxxx Xxxxxx Xxxxxxxxx
Chairman of the Board
State of Missouri \
|
> ss
|
County of St. Louis /
I, Xxxxxx Xxxxxxxxx, a Notary Public, do hereby certify that on this 12th
day of November, 1987, personally appeared before me Xxxxxx Xxxxxxxxx who,
being by me first duly sworn, declared that he is the Chairman of the Board of
World Communications, Inc. that he signed the foregoing document as Chairman of
the Board of the corporation, and that the statements therein contained are
true.
/s/ Xxxxxx Xxxxxxxxx
NOTARIAL SEAL ---------------------------------
Notary Public
My commission expires ____________
XXXXXX XXXXXXXXX
NOTARY PUBLIC, STATE OF MISSOURI
MY COMMISSION EXPIRES JAN. 21, 1983
ST. LOUIS COUNTY
FILED AND CERTIFICATE
I S S U E D
JAN. 25, 1988
/s/ Xxx X. Xxxxx
Corporation Dept. SECRETARY OF STATE
92
WORLD COMMUNICATIONS, INC.
0 XXXXXXXXX XXXXXXXX XXXXXX XXXXX
XX. XXXXX, XXXXXXXX 00000
STATE OF MISSOURI
XXX X. XXXXX, Secretary of State
CORPORATION DIVISION
STATEMENT OF CHANGE OF REGISTERED AGENT OR
REGISTERED OFFICE BY FOREIGN OR DOMESTIC CORPORATIONS
INSTRUCTIONS
There is a $5.00 fee for filing this statement. It must be filed in
DUPLICATE.
The statement should be sealed with the corporate seal. If it does not
have a seal, write "no seal" where the seal would otherwise appear.
The registered office may be, but need not be, the same as the place of
business of the corporation, but the registered office and the business address
of the agent must be the same. The corporation cannot act as its own registered
agent.
Any subsequent change in the registered office or agent must be
immediately reported to the Secretary of State. These forms are available upon
request from the Office of the Secretary of State.
To: XXXXXXXXX XX XXXXX
X.X. Xxx 000
Xxxxxxxxx Xxxx, Xxxxxxxx 00000 Charter No. 00292002
RECEIVED
OCT. 18, 1988
XXX X. XXXXX
Corporation Dept. SECRETARY OF STATE
The undersigned corporation, organized and existing under the laws of the
State of Missouri for the purpose of changing its registered agent or its
registered office, or both, in Missouri as provided by the provisions of "The
General and Business Corporation Act of Missouri," represents that:
1. The name of the corporation is World Communications, Inc.
2. The name of its PRESENT registered agent (before change) is Xxxxxx
Xxxxxxxxx.
3. The name of the new registered agent is Xxxx X. Xxxxxxxxxx.
4. The address, including street number, if any, of its PRESENT registered
office (before change) is 0000 Xxxxxxxx, Xxxxx 0000, Xxxxxxx, XX 00000.
5. Its registered office (including street number, if any change is to be
made) is hereby CHANGED TO 000 Xxxxx Xxxxxxx - Xxxxx 000, Xxxxxxx, XX 00000.
6. The address of its registered office and the address of the business office
of its registered agent, as changed will be identical.
(Over)
93
Such change was authorized by resolution duly adopted by the board of
directors.
IN WITNESS WHEREOF, the undersigned corporation has caused this report to
be executed in its name by its PRESIDENT or VICE-PRESIDENT, attested by its
SECRETARY or ASSISTANT SECRETARY this 14th day of OCTOBER, 1988.
World Communications, Inc.
---------------------------------
Name of Corporation
(Corporate Seal) By /s/ Xxxx X. Xxxx
NONE ------------------------------
If no seal, state "none". President or Vice-President
Xxxx X. Xxxx
Attest:
/s/ Xxxxx Xxxxxx F I L E D
-------------------------------- OCT 18, 1988
Secretary or Assistant Secretary Xxx X. Xxxxx
Xxxxx Xxxxxx SECRETARY OF STATE
State of Missouri \
> ss
County of St. Louis /
I, XXXXXXX XXX XXXXXXXXXXX, a Notary Public, do hereby certify that on the
14TH day of OCTOBER, 1988, personally appeared before me XXXX X. XXXX who
declares he is President or Vice-President of the corporation, executing the
foregoing document, and being first duly sworn, acknowledged that he signed the
foregoing document in the capacity therein set forth and declared that the
statements therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal the day and year
before written.
(Notarial Seal) /s/ Xxxxxxx Xxx Xxxxxxxxxxx
--------------------------------
Notary Public
My commission expires November 2, 1991
94
No. 00292002
STATE OF MISSOURI
XXX X. XXXXX, Secretary of State
CORPORATION DIVISION
SEAL OF THE SECRETARY OF STATE
[LOGO]
MISSOURI
CERTIFICATE OF AMENDMENT
WHEREAS, WORLD COMMUNICATIONS, INC. a corporation organized under The General
and Business Corporation Law has delivered to me a Certificate of Amendment of
its Articles of Incorporation and has in all respects complied with the
requirements of law governing the amendment of Articles of Incorporation under
The General and Business Corporation Law.
NOW, THEREFORE, I, XXX X. XXXXX, Secretary of State of the State of Missouri,
do hereby certify that I have filed said Certificate of Amendment as provided
by law, and that the Articles of Incorporation of said corporation are amended
in accordance therewith.
IN TESTIMONY WHEREOF, I hereunto set my hand and affix
[SEAL] the GREAT SEAL of the State of Missouri. Done at the
City of Jefferson, this 22nd day of February, 1990.
/s/ Xxx X. Xxxxx
----------------------------
Secretary of State
Fee $20.00
95
4. Of the 1,985 shares outstanding, 1,985 of such shares were entitled to vote
on such amendment.
The number of outstanding shares of any class entitled to vote thereon as a
class were as follows:
Class Number of Outstanding Shares
----- ----------------------------
Common 1,985
5. The number of shares voted for and against the amendment was as follows:
Class No. Voted For No. Voted Against
----- ------------- -----------------
Common 1,738 -0-
Holders of 247 shares of
common stock were not present
and did not vote.
6. If the amendment changed the number or par value of authorized shares
having a par value, the amount in dollars of authorized shares having a par
value as changed is:
Five Thousand Dollars ($5,000.00)
If the amendment changed the number of authorized shares without par
value, the authrozed number of shares without par value as changed and the
consideration proposed to be received for such increased authorized shares
without par value as are to be presently issued are:
7. If the amendment provides for an exchange, reclassification, or
cancellation of issued shares, or a reduction of the number of authorized
shares of any class below the number of issued shares of that class, the
following is a statement of the manner in which such reduction shall be
effected:
The current outstanding shares having a par value of
33.33-1/3 cents each will be exchanged for shares with a par value of
.01 cents each.
96
IN WITNESS WHEREOF, the undersigned, Vice President has executed this
instrument and its Secretary has affixed its corporate seal hereto and attested
said seal on the 12th day of February, 1990.
PLACE
CORPORATE SEAL
HERE.
(IF NO SEAL, STATE "NONE")
World Communications, Inc.
-----------------------------------
Name of Corporation
ATTEST:
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
------------------------------ -------------------------------
Secretary Vice-President
FILED AND CERTIFICATE
State of Missouri I S S U E D
ss FEB. 23, 0000
Xxxxxx xx Xx. Xxxxx Xxx X. Xxxxx
Corporation Dept. SECRETARY OF STATE
I, Xxxx X. Xxxxxxxx, a Notary Public, do hereby certify that on this 19th
day of February, 1990, personally appeared before me Xxxxx X. Xxxxxx who, being
by me first duly sworn, declared that she is the Vice President of World
Communications, Inc. that she signed the foregoing document as Vice President
of the corporation, and that the statements therein contained are true.
/s/ Xxxx X. Xxxxxxxx
------------------------------------
NOTARIAL SEAL Notary Public
My commission expires ______________
XXXX X. XXXXXXXX
NOTARY PUBLIC, STATE OF MISSOURI
MY COMMISSION EXPIRES APRIL 28, 0000
XX. XXXXX XXXXXX
00
Xx. 00000000
XXXXX XX XXXXXXXX
XXX X. XXXXX, Secretary of State
CORPORATION DIVISION
SEAL OF THE SECRETARY OF STATE
[LOGO]
MISSOURI
CERTIFICATE OF AMENDMENT
WHEREAS, WORLD COMMUNICATIONS, INC. a corporation organized under The General
and Business Corporation Law has delivered to me a Certificate of Amendment of
its Articles of Incorporation and has in all respects complied with the
requirements of law governing the amendment of Articles of Incorporation under
The General and Business Corporation Law.
NOW, THEREFORE, I, XXX X. XXXXX, Secretary of State of the State of Missouri,
do hereby certify that I have filed said Certificate of Amendment as provided
by law, and that the Articles of Incorporation of said corporation are amended
in accordance therewith.
IN TESTIMONY WHEREOF, I hereunto set my hand and affix
[SEAL] the GREAT SEAL of the State of Missouri. Done at the
City of Jefferson, this 19th day of December, 1990.
/s/ Xxx X. Xxxxx
----------------------------
Secretary of State
Fee $20.00
98
STATE OF MISSOURI . . . . . Office of Secretary of State
SEAL OF THE SECRETARY OF STATE XXX X. XXXXX, Secretary of State
[LOGO]
MISSOURI
Amendment of Articles of Incorporation
(To be submitted in duplicate)
XXXXXXXXX XXX X. XXXXX
SECRETARY OF STATE
STATE OF MISSOURI
X.X. XXX 000
XXXXXXXXX XXXX, XX 00000
Pursuant to the provisions of The General and Business Corporation Law
of Missouri, the undersigned Corporation certifies the following:
1. The present name of the Corporation is WORLD COMMUNICATIONS, INC.
-----------------------------------
------------------------------------------------------------------------------
The name under which it was originally organized was WORLD COMMUNICATIONS, INC.
---------------------------
--------------------------------------------------------------------------------
2. An amendment to the Corporation's Articles of Incorporation was adopted by
the shareholders on September 12 , 1990
------------------------------------------------------ ----
3. Article Number V is amended to read as follows:
------------
The number of Directors shall be fixed by, or in the manner provided by
the By-Laws. Any change in the number shall be reported to the Secretary of
State within thirty (30) calendar days of such change.
(If more than one article is to be amended or more space is needed attach fly
sheet.)
99
IN WITNESS WHEREOF, the undersigned, Xxxx X. Xxxx, President has
executed this instrument and Xxxxx X. Xxxxxx, its Secretary has affixed
its corporate seal hereto and attested said seal on the 30th day of
November, 1990.
PLACE
CORPORATE SEAL
HERE.
(IF NO SEAL, STATE "NONE")
WORLD COMMUNICATIONS, INC.
-----------------------------------
Name of Corporation
ATTEST:
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxx
------------------------------ -------------------------------
Secretary President
FILED AND CERTIFICATE
State of Missouri \ I S S U E D
> ss DEC. 19, 0000
Xxxxxx xx Xx. Xxxxxxx / Xxx X. Xxxxx
Corporation Dept. SECRETARY OF STATE
I, Xxxxx X. Xxxxxx, a Notary Public, do hereby certify that on this 30th
day of November, 1990, personally appeared before me Xxxx X. Xxxx who, being
by me first duly sworn, declared that he is the President of World
Communications, Inc. that he signed the foregoing document as President
of the corporation, and that the statements therein contained are true.
/s/ Xxxxx X. Xxxxxx
------------------------------------
NOTARIAL SEAL Notary Public
My commission expires 2-23-93
100
ARTICLE IV.
Right of Purchase
-----------------
Every shareholder, upon the sale of any new stock of this Corporation
of the same kind, class or series as that which he already holds, shall have
the right to purchase his pro rata share at the price at which it is offered to
others.
ARTICLE V.
Incorporator
------------
The name and street address of the Incorporator of this Corporation is
as follows:
Xxxxx X. Self
Xxxxx 000, 000 X. Xxxxxx Xxxxxx
First Florida Bank Building
Xxxxxxxxxxx, Xxxxxxx 00000
ARTICLE VI.
Term of Corporate Existence
---------------------------
The Corporation shall exist perpetually unless dissolved according to law.
ARTICLE VII.
Address of Registered Office and Registered Agent
-------------------------------------------------
The address of the initial registered office of the Corporation in the
State of Florida shall be Suite 701, First Florida Bank Building, 000 X. Xxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxx 00000. The name of the initial registered agent of
the Corporation at the above address shall be Xxxxx X. Self. The Board of
Directors may from time to time change the registered office to any other
address in the State of Florida or change the registered agent.
-2-
101
ARTICLE VIII.
Number of Directors
-------------------
The business of the Corporation shall be managed by a Board of Directors
consisting of at least one person, the exact number to be determined from time
to time in accordance with the By-Laws.
ARTICLE IX.
Initial Board of Directors
--------------------------
The initial Board of Directors shall consist of seven (7) members. The
names and street addresses of the members of the initial Board of Directors of
the Corporation, who shall hold office until the first annual meeting of the
shareholders, and thereafter until their successors have been elected and
qualified are as follows:
Xxxxxx Xxxxxxxxx, Director
Chairman and Treasurer
0000 Xxxxxxxxx Xxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Xxxx X. Xxxx, Director
President
0000 Xxxxxxxxx Xxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Xxxxx X. Xxxxxx, Director
Vice President and Secretary
0000 Xxxxxxxxx Xxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Xxxxxx X. Xxxxxxxxx, Director
0000 Xxxxxxxxx Xxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Xxxx X. Xxxxxx, Director
0000 Xxxxxxxxx Xxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
-3-
102
Xxxxx Xxxxxxx, Director
0000 Xxxxxxxxx Xxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Xxxx Xxxxxxxxxx, Director
0000 Xxxxxxxxx Xxxxxxxx Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
ARTICLE X.
Officers
--------
The Corporation shall have a President, a Secretary and a Treasurer and
may have additional assistant officers, including, without limitation thereto,
one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers.
Any two or more officers may be held by the same person.
ARTICLE XI.
Transactions in Which Directors
-------------------------------
Or Officers Are Interested
--------------------------
(a) No contract or other transaction between the Corporation and one or
more of its Directors or officers, or between the Corporaiton and any other
corporation, firm, or entity in which one or more of the Corporation's
Directors or officers are directors or officers, or have a financial interest,
shall be void or voidable solely because of such relationship or interest, or
solely because such Director(s) or officer(s) are present at or participate in
the meeting of the Board of Directors or a committee thereof which authorizes,
approves or ratifies such contract or transaction, or solely because his or
their votes are counted for such purpose, if:
(1) the fact of such relationship or interest is disclosed or known to
the Board of Directors or the committee which authorizes, approves or ratifies
the contract or
-4-
103
transaction by a vote or consent sufficient for the purpose, without counting
the votes or consents of such interested Director or Directors; or
(2) The fact of such relationship or interest is disclosed or known
to the shareholders entitled to vote thereon, and they authorize, approve, or
ratify such contract or transaction by vote or written consent; or
(3) The contract or transaction is fair and reasonable as to the
Corporation at the time it is authorized.
(b) Common or interested Directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
thereof which authorizes, approves, or ratifies such contract or transaction.
ARTICLE XII.
Indemnification of Directors and Officers
-----------------------------------------
(a) The Corporation hereby indemnifies and agrees to hold harmless from
claim, liability, loss or judgment any Director or officer made a party or
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative, or investigative
(other than an action, suit or proceeding by or on behalf of the Corporation to
procure a judgment in its favor), brought to impose a liability or penalty on
such person for an act alleged to have been committed by such person in his
capacity as Director, officer, employee or agent of the Corporation or any
other corporation, partnership, joint venture, trust or other enterprise in
which he served at the request of the Corporation, against judgments, fines,
amounts paid in settlement and reasonable expenses, including attorneys' fees
actually and reasonably incurred as a result of such action, suit or proceeding
or any appeal thereof, if such person acted in good faith in the
-5-
104
reasonable belief that such action was in, or not opposed to, the best
interests of the Corporation, and in criminal actions or proceedings, without
reasonable ground for belief that such action was unlawful. The termination of
any such action, suit or proceeding by judgment, order, settlement, conviction
or upon a plea of nolo contendere or its equivalent shall not create a
presumption that any such Director of officer did not act in good faith in the
reasonable belief that such action was in, or not opposed to, the best
interests of the Corporaiton. Such person shall not be entitled to
indemnification in relation to matters as to which such person has been
adjudged to have been guilty of gross negligence or willful misconduct in the
performance of his duties to the Corporation.
(b) Any indemnification under paragraph (a) shall be made by the
Corporation only as authorized in the specific case upon a determination that
amounts for which a Director or officer seeks indemnification were properly
incurred and that such Director or officer acted in good faith and in a manner
he reasonably believed to be in, or not opposed to, the best interests of the
Corporation, and that, with respect to any criminal action or proceeding, he
had no reasonable ground for belief that such action was unlawful. Such
determination shall be made either (1) by the Board of Directors by a majority
vote of a quorum consisting of Directors who were not parties to such action,
suit or proceeding, or (2) by a majority vote of a quorum consisting of
shareholders who were not parties to such action, suit or proceeding.
(c) The Corporation shall be entitled to assume the defense of any person
seeking indemnification pursuant to the provisions of paragraph (a) above upon
a preliminary determination by the Board of Directors that such person has met
the applicable standards of conduct set forth in paragraph (a) above, and upon
receipt of an undertaking by such
-6-
105
person to repay all amounts expended by the Corporation in such defense, unless
it shall ultimately be determined that such person is entitled to be
indemnified by the Corporation as authorized in this article. If the Corporation
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and not objected to in writing for valid reasons by such person. In the
event that the Corporation elects to assume the defense of any such person and
retains such counsel, such person shall bear the fees and expenses of any
additional counsel retained by him, unless there are conflicting interests
between or among such person and other parties represented in the same action,
suit or proceeding by the counsel retained by the Corporation, that are, for
valid reasons, objected to in writing by such person, in which case the
reasonable expenses of such additional representation shall be within the scope
of the indemnification intended if such person is ultimately determined to be
entitled thereto as authorized in this article.
(d) The foregoing rights of indemnification shall not be deemed to limit
in any way the power of the Corporation to indemnify under any applicable law.
ARTICLE XIII.
Financial Information
---------------------
The Corporation shall not be required to prepare and provide a balance
sheet or a profit and loss statement to its shareholders, nor shall the
Corporation be required to file a balance sheet or profit and loss statement in
its registered office. This provision shall be demed to have been ratified by
the shareholders each year hereafter unless a resolution to the contrary has
been adopted by the shareholders.
-7-
106
ARTICLE XIV.
Amendment
---------
These Articles of Incorporation may be amended in any manner now or
hereafter provided for by law and all rights conferred upon shareholders
hereunder are granted subject to this reservation.
IN WITNESS WHEREOF, the undersigned, being the original subscribing
Incorporator to the foregoing Articles of Incorporation has hereunto set his
hand and seal this 30th day of April, 1990.
/s/ Xxxxx X. Self
-------------------------------
Xxxxx X. Self
-8-
107
STATE OF FLORIDA
COUNTY OF XXXX
I HEREBY CERTIFY that on this day personally appeared before me, the
undersigned authority, Xxxxx X. Self, to me well known and known to me to be
the person who executed the foregoing instrument and acknowledged before me
that he executed the same freely and voluntarily for the uses and purposes
therein set forth and expressed.
IN WITNESS WHEREOF, I have hereunto set my hand and official seal on this
30th day of April, 1990.
/s/ Xxx X. Xxxxxxx
------------------------------------
NOTARY PUBLIC
My commission expires: _____________
Notary Public, State of Florida
My Commission Expires June 24, 1991
Corporation Dept. SECRETARY OF STATE
-9-
108
CERTIFICATE DESIGNATING REGISTERED AGENT AND REGISTERED OFFICE
In compliance with Florida Statutes Section 48.091 and 607.304, the
following is submitted:
Northern Florida Telephone Corporation, desiring to organize as a
corporation under the laws of the State of Florida, has designated Suite 701,
First Florida Bank Building, 000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxx
00000, as its initial Registered Office and has named Xxxxx X. Self located at
said address, as its initial Registered Agent.
By: /s/ Xxxxx X. Self
----------------------------
Xxxxx X. Self
Incorporator
Having been named Registered Agent for the above stated corporation, at
the designated Registered Office, the undersigned hereby accepts said
appointment, and agrees to comply with the provisions of Florida Statutes
Section 48.091 relative to keeping the office open.
/s/ Xxxxx X. Self
---------------------------------
Xxxxx X. Self
109
EXHIBIT M
BYLAWS
OF
WORLD COMMUNICATIONS, INC.
ARTICLE I
---------
Offices
-------
The principal office of the corporation shall be located in St. Louis
County, Missouri.
ARTICLE II
----------
Shareholders
------------
SECTION 2.01. PLACE OF MEETING. All meetings of the shareholders
shall be held at the office of the corporation or at such other place within or
without the State of Missouri as may be designated by the President or the
Board of Directors.
SECTION 2.02. ANNUAL MEETING. Unless otherwise designated by the
Board of Directors, the annual meeting of shareholders, commencing with the
year 1987, shall be held on the Third Tuesday in January each year if not a
legal holiday, and if a legal holiday, then the day following, at 10:00 a.m.,
for the election of Directors and for the transaction or such other business as
shall properly come before the meeting.
SECTION 2.03. SPECIAL MEETINGS. Special meetings of the shareholders
for any purpose or purposes may be called by the President or by the Board of
Directors, or by the Secretary at the request in writing by shareholders owning
at least one-fifth (1/5) in amount of the entire capital stock of the
corporation issued and outstanding.
SECTION 2.04. NOTICE OF MEETINGS. Written or printed notice of
shareholders' meetings shall be given in accordance with the laws of the State
of Missouri.
SECTION 2.05. SHAREHOLDERS ENTITLED TO VOTE. The Board of Directors
may prescribe a period not exceeding fifty (50) days prior to any meeting of
the shareholders during which no transfer of stock on the books of the
corporation may be made. The Board of Directors may fix a day not more than
fifty (50) days prior to the holding of any meeting of the shareholders as the
day as of which shareholders are entitled to notice of and to vote at such
meeting.
SECTION 2.06. QUORUM. The holders of a majority of the stock issued
and outstanding, present in person or represented
110
by proxy, shall be requisite and shall constitute a quorum at all meetings of
the shareholders for the transaction of business except as otherwise provided
by law, by the Articles of incorporation or by these Bylaws.
SECTION 2.07. VOTING. At each meeting of the shareholders, every
shareholder shall be entitled to vote in person, or by proxy appointed by an
instrument in writing subscribed by such shareholder, or by his duly authorized
attorney, and he shall have one vote for each share of stock registered in his
name at the time of the closing of the transfer books for said meeting, or in
lieu of closing of the transfer books the record date for voting as fixed by
the Board of Directors.
The vote of the holders of a majority of the stock having voting power
present in person or represented by proxy shall decide any question brought
before such meeting, unless the question is one upon which by express
provision of the statutes or of the Articles of Incorporation a different vote
is required, in which case such express provision shall govern and control
the decision of such question.
SECTION 2.08. INFORMAL MEETINGS. Whenever the vote of shareholders
at a meeting thereof is required or permitted to be taken in connection with
any corporate action by any provisions of the statutes or of the Articles of
incorporation, the meeting, any notice thereof and vote of shareholders thereat
may be dispensed with if all the shareholders who would have been entitled to
vote upon the action if such meeting were held shall consent in writing to such
corporate action being taken. Such written consent shall be filed with the
minutes of shareholders meetings.
SECTION 2.09. ORGANIZATION. The President, and in his absence, the
Vice-President, and in the absence of both the President and the
Vice-President, a chairman chosen by the shareholders present, shall preside
at each meeting of shareholders and shall act as chairman thereof. The
Secretary, and in his absence the Assistant Secretary, and in the absence of
both the Secretary and the Assistant Secretary, a Secretary pro tem, chosen by
the shareholders present, shall act as Secretary of all meetings of the
shareholders.
SECTION 2.10. ADJOURNMENT. If at any meeting of the shareholders a
quorum shall fail to attend at the time and place for which the meeting was
called or if the business of such meeting shall not be completed, the
shareholders present in person or represented by proxy may, by a majority vote,
adjourn the meeting from day to day or from time to time, not exceeding ninety
(90) days from such adjournment without further notice until a quorum shall
attend or the business thereof shall be completed. At any such adjourned
meeting any business may be transacted
-2-
111
which might have been transacted at the meeting as originally called.
ARTICLE III
-----------
Directors
---------
SECTION 3.01. GENERAL POWERS. The business and affairs of the
corporation shall be managed by its Board of Directors.
SECTION 3.02. NUMBER, ELECTION AND TERM. The number of directors of
the corporation shall be three (3), who shall be elected at the annual meeting
of the shareholders for a term of one year, and who shall hold office until
their successors have been elected and have qualified.
SECTION 3.03. REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held without other notice than this Bylaw, immediately
after, and at the same place as, the annual meeting of shareholders.
SECTION 3.04. VACANCIES. Vacancies and newly created directorships
resulting from any increase in the authorized number of Directors may be filled
by a majority of the Directors then in office, though less than a quorum, and
the Directors so chosen shall hold office until the next annual election and
until their successors are duly elected and shall qualify, unless sooner
displaced.
SECTION 3.05. PLACE OF MEETING. Meetings of the Board of Directors of
the corporation, both regular and special, may be held at any place either
within or without the State of Missouri, and unless otherwise designated as
herein provided, shall be held at the office of the corporation.
SECTION 3.06. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held at such time and place as shall from time to time be
determined by resolution of the Board.
SECTION 3.07. NOTICE OF REGULAR MEETINGS. After the time and place of
regular meetings shall have been determined, no notice of any regular meetings
need be given. Notice of any change in the date or place of holding any
regular meeting or any adjournment of a regular meeting shall be given by mail
or telegram not less than forty-eight (48) hours before such meeting to all
Directors.
SECTION 3.08. SPECIAL MEETINGS. Special meetings of the Board for
any purpose or purposes may be called by the President on two (2) days notice
to each Director either personally or by mail or by telegram. Upon like
notice, the Secretary of the corporation, upon the written request of a
majority of the Directors, shall call a special meeting of the Board. Such
request shall state the purpose or purposes of the proposed
-3-
112
meeting. The officer calling the special meeting may designate the place for
holding same.
SECTION 3.09. QUORUM. At all meetings of the Board, a majority of
the Directors shall constitute a quorum for the transaction of business and
the act of a majority of the Directors present at any meeting at which there is
a quorum shall be the act of the Board of Directors, except where otherwise
provided by law or by these Bylaws. If a quorum shall not be present at any
meeting of the Board of Directors, the Directors present thereat may adjourn
the meeting from time to time without notice other than announcement at the
meeting until a quorum shall be present.
SECTION 3.10. INFORMAL MEETINGS. Whenever the vote of directors to
be taken in connection with any corporate action is permitted by any provisions
of the Laws of Missouri to be taken by written consent it shall be approved if
the requisite number of Directors shall consent in writing to such corporate
action being taken. Such written consent shall be filed with the minutes of
the Board.
SECTION 3.11. COMMITTEES OF DIRECTORS. The Board of Directors may,
by resolution passed by a majority of the whole Board, designate one or more
committees, each committee to consistent of two or more of the Directors of the
corporation, which, to the extent provided in the resolution, shall have and
may exercise the powers of the Board of directors in the management of the
business and affairs of the corporation and may authorize the seal of the
corporation to be affixed to all papers which may require it. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the Board of Directors. Each committee shall
keep regular minutes of its meetings and report the same to the Board of
Directors when required.
SECTION 3.12. ORGANIZATION. The President, and in his absence a
Vice-President, and in the absence of the president and all the
Vice-Presidents, a Chairman pro tem, chosen by the Directors present shall
preside at each meeting of the Directors and shall act as Chairman thereof.
The Secretary, and in his absence, the Assistant Secretary, and in the
absence of the Secretary and the Assistant Secretary, a Secretary pro tem,
chosen by the Directors present shall act as Secretary of all meetings of the
Directors.
SECTION 3.13. MINUTES AND STATEMENTS. The Board of Directors shall
cause to be keep a complete record of their meetings and acts, and of the
proceedings of the shareholders.
-4-
113
ARTICLE IV
----------
Officers
--------
SECTION 4.01. OFFICERS. The Officers of this corporation shall be a
President and a Secretary; the Board of Directors may also from time to time
elect one or more Vice-Presidents, one or more Assistant Secretaries, a
Treasurer, and one or more Assistant Treasurers; all of whom shall be chosen by
the Board of Directors. Any person may hold two or more offices.
SECTION 4.02. SUBORDINATE OFFICERS AND EMPLOYEES. The Board of
Directors may appoint such other officers and agents as it may deem necessary
who shall hold their offices for such terms and shall exercise such powers and
perform such duties as shall be determined from time to time by the Board.
SECTION 4.03. COMPENSATION. The Board of Directors may from time to
time, in its discretion, fix or alter the compensation of any officer or
agent.
SECTION 4.04. ELECTION AND TERM OF OFFICE. The officers of the
corporation shall be elected annually by the Board of Directors at the regular
annual meeting of the Board of Directors. Each officer shall hold office
until his successor shall have been duly elected and shall have qualified or
until his death or until he shall resign or shall have been removed in the
manner hereinafter provided. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board of Directors whenever in its
judgment the best interests of the corporation would be served thereby. A
vacancy in any office because of death, resignation, removal, disqualification
or otherwise, may be filled by the Board of Directors for the unexpired portion
of the term at any meeting of the Board.
SECTION 4.05. PRESIDENT. The President shall be the chief executive
officer of the corporation. He shall preside at all meetings of the
shareholders and Directors. He shall have general and active management of
the business of the corporation and shall see that all orders and resolutions
of the Board of directors are carried into effect, subject, however, to the
right of the Board of Directors by resolution to delegate any specific powers
(other than those which may be by statute exclusively conferred upon the
President), to any other officers, director or agent of the corporation. The
President shall, on behalf of the corporation and as authorized by the Board of
Directors, execute all deeds, notes, bonds, mortgages, contracts and other
instruments in writing, except where the signing and execution thereof shall be
expressly delegated by the Board of Directors to some other officer or agent of
the corporation. He may vote all securities which the corporation is entitled
to vote except as and to the extent such authority shall be vested
-5-
114
in a different officer or agent or the corporation by the Board of Directors.
SECTION 4.06. VICE-PRESIDENT. The Vice-Presidents, in the order
designated by the Board of Directors, shall, in the absence or disability of
the President, perform the duties and exercise the powers of the President and
shall perform such other duties and have such other powers as the Board of
Directors or the President may from time to time prescribe.
SECTION 4.07. THE SECRETARY. The Secretary shall attend all
meetings of the shareholders of the corporation and of the Board of Directors
and shall record all of the proceedings of such meetings in minute books kept
for that purpose. He is authorized to affix the corporate seal to all
instruments requiring it. He shall have charge of the corporate records,
and, except to the extent authority may be conferred upon any transfer agent or
registrar duly appointed by the Board of Directors, he shall maintain the
corporation's books, registers, stock certificate and stock transfer books and
stock ledgers, and such other books, records and papers as the Board of
directors may from time to time entrust to him. He shall give or cause to be
given proper notice of all meetings of shareholders and Directors as required
by law and the Bylaws, and shall perform such other duties as may from time to
time be prescribed by the Board of Directors or the President.
SECTION 4.08. THE ASSISTANT SECRETARY. Each Assistant Secretary
shall assist the Secretary in the performance or his duties, and may at any
time perform any of the duties of the Secretary; in case of the death,
resignation, absence or disability of the Secretary, the duties of the
Secretary shall be performed by an Assistant Secretary, and each Assistant
Secretary shall have such other powers and perform such other duties as, from
time to time, may be assigned to him by the Board of Directors.
SECTION 4.09. THE TREASURER. The Treasurer shall have the custody of
the corporate funds and securities, and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the corporation, and shall
deposit all monies and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered
by the Board, taking proper vouchers for such disbursements, and shall render
to the President and directors at the regular meetings of the Board, or
whenever they may require it, an account of all his transactions as Treasurer,
and of the financial conditions of the corporation.
SECTION 4.10. THE ASSISTANT TREASURER. Each Assistant treasurer
shall assist the Treasurer in the performance of his duties, and may at any
time perform any of the duties of the
-6-
115
Treasurer; in case of the death, resignation, absence or disability of the
Treasurer, the duties of the Treasurer shall be performed by an Assistant
Treasurer, and each Assistant Treasurer shall have such other powers and
perform such other duties as, from time to time, may be assigned to him by the
Board of Directors.
ARTICLE V
---------
Resignations
------------
Any Director or officer may resign his office at any time, such
resignation to be made in writing and to take effect from the time of its
receipt by the corporation, unless some time be fixed in the resignation, and
then from that time. The acceptance of a resignation shall not be required to
make it effective.
ARTICLE VI
----------
Contracts and Loans
-------------------
SECTION 6.01. CONTRACTS. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the corporation, and
such authority may be general or confined to specific instances.
SECTION 6.02. LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
ARTICLE VII
-----------
Certificates for Shares and Their Transfer
------------------------------------------
SECTION 7.01. CERTIFICATES FOR SHARES. Certificates representing
shares of the corporation shall be in such form as may be determined by the
Board of Directors. Such certificates shall be signed by the President or
Vice-President and by the Secretary or an Assistant Secretary and shall be
sealed with the seal of the corporation. All certificates for shares shall be
consecutively numbered. The name of the persons owning the shares represented
thereby with the number or shares and date of issue shall be entered on the
books of the corporation. All certificates surrendered to the corporation for
transfer snail be cancelled and no new certificate shall be issued until the
former certificate for a like number of shares shall have been surrendered and
cancel led, except that in case of a lost, destroyed or mutilated certificate a
new one may be issued there
-7-
116
for upon such terms and indemnity to the corporation as the Board of Directors
may prescribe.
SECTION 7.02. TRANSFERS OF SHARES. Transfers or shares or the
corporation shall be made only on the books of the corporation by the
registered holder thereof or by his attorney thereunto authorized by power of
attorney duly executed and filed with the secretary of the corporation, and on
surrender for cancellation of the certificate for such shares. The person in
whose name shares stand on the books of the corporation shall be deemed the
owner thereof for all purposes as regards the corporation.
ARTICLE VIII
------------
Dealings with Companies in Which Directors May Have an Interest
---------------------------------------------------------------
Inasmuch as the Directors of this corporation are or may be men of
diversified business interests, and are likely to be connected with other
corporations with which from time to time this corporation may have business
dealings, no contract or other transaction between this corporation and any
other corporation shall be affected by the fact that Directors of this
corporation are interested in, or are directors or officers of such other
corporation.
ARTICLE IX
----------
Miscellaneous provisions
------------------------
SECTION 9.01. FISCAL YEAR. The fiscal year or the corporation shall
be determined by the Board of Directors.
SECTION 9.02. INSPECTION OF BOOKS. The directors shall determine
from time to time whether, and, if allowed, when and under what conditions and
regulations the accounts and books of the corporation (except such as may by
statute be specifically open to inspection) or any of them shall be open to
inspection of the shareholders, and shareholders' rights in this respect are
and shall be restricted and limited accordingly.
SECTION 9.03. CHECKS AND NOTES. All checks and drafts on the
corporation's bank accounts and all bills of exchange and promissory notes,
and all acceptances, obligations and other instruments for the payment of
money, shall be signed by such officer or officers or agent or agents as shall
be thereunto duly authorized from time to time by the Board of Directors;
provided, that checks drawn on the corporation's payroll, dividend and special
accounts may bear the facsimile signatures, affixed there to by a mechanical
device, of such officers or agents as the Board of Directors may authorize.
-8-
117
SECTION 9.04. DIVIDENDS. The Board of Directors shall declare such
dividends as they in their discretion see fit whenever the condition of the
corporation, in their opinion, shall warrant the same. The Board may declare
dividends in cash, in property or in capital stock.
SECTION 9.05. NOTICES. Whenever, under the provisions of these
Bylaws notice is required to be given to any Director, officer or shareholder,
it shall not be construed to mean personal notice, but such notice may be
given in writing by depositing the same in the post office or letter box, in a
postpaid sealed wrapper addressed to such shareholder, officer or Director at
such address as appears on the records of the corporation, and such notice
shall be deemed to be given at the time when the same shall be thus mailed.
SECTION 9.06. SEAL. The corporation may have a seal inscribed with
the name of the corporation and its state of incorporation.
ARTICLE X
---------
Indemnification
---------------
SECTION 10.01. MANDATORY INDEMNIFICATION. The corporation shall, to
the full extent permitted by the Missouri Business Corporation Law, indemnify
any person who was or is a party or threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was a director or officer of the corporation or is or was serving at the
request of the corporation as a director or officer of any other corporation or
enterprise. Such right of indemnification shall inure to the benefit of the
heirs, executors, administrators and personal representatives of such a
person.
SECTION 10.02. PERMISSIVE SUPPLEMENTARY BENEFITS. The corporation
may, but shall not be required to, supplement the right of indemnification
under Section 10.01 by (a) the purchase of insurance on behalf of any one or
more of such persons, whether or not the corporation would be obligated to
indemnify such person under Section 10.01, (b) individual or group
indemnification agreements with any one or more of such persons and (c)
advances for related expenses of such a person.
SECTION 10.03. AMENDMENT. This Article X may be amended or repealed only
by a vote of the shareholders and not by a vote of the Board of Directors.
-9-
118
ARTICLE XI
----------
Amendments
----------
These bylaws may be altered, amended or repealed and new bylaws may be
adopted by the Board of Directors or by the Shareholders at any annual or
special meeting.
ARTICLE XII
-----------
Shareholders' Agreement
-----------------------
Notwithstanding anything contained herein to the contrary, the provisions
of these Bylaws shall be subject to the provisions of any shareholders'
agreement to which the corporation is a party, which in the case of a conflict,
shall control.
ARTICLE XIII
------------
Construction
------------
When used herein, the male gender shall include the female gender and the
plural shall include the singular as is appropriate.
-10-
119
[logo] EXHIBIT N
FINANCIAL SERVICES LTD.
May 2, 1995
Confidential
------------
Xx. Xxxxxx Xxxxxxxxx, Chairman
World Communications, Inc.
00000 Xxxxxxx Xxxx Xx.
Xx. Xxxxx, Xxxxxxxx 00000
Dear Xx. Xxxxxxxxx:
Under the terms of this agreement (the "Agreement") M&M Financial Services,
Ltd. ("M&M") is hereby authorized to represent World Communications, Inc.
and its Subsidiaries ("WCI") as its financial advisor in connection with the
contemplated sale of the assets of the business to PhoneTel Technologies, Inc.
("PhoneTel").
I Performance of Services
- -----------------------
Under this Agreement, M & M will work with WCI and use its best efforts to
provide ongoing financial advisory services. The anticipated scope of the
engagement is as follows:
A. To advise and assist WCI in screening and analyzing potential offers from
PhoneTel;
B. To discuss with WCI representatives various alternative financial
strategies which may be implemented in order to create the greatest asset
value of WCI. M & M will assist in the evaluation of these strategies and
provide advice as to the manner in which to structure and implement plans
designed to finalize the stated objective;
C. To develop judgments as to relative values and financial implications to
WCI of any proposed transaction and then in consultation with WCI and
legal, accounting, and/or tax counselors, advise WCI on appropriate
negotiating strategies.
II Representation Period
-- ---------------------
This Agreement will become effective as of May 2, 1995 and continue for a
period of six (6) months. This Agreement shall continue indefinitely
thereafter until such time as either party terminates this appointment by
giving ten (10) days written notice of such termination to the other party.
120
Xx. Xxxxxx Xxxxxxxxx, Chairman
May 2, 1995
Page Two
III Compensation of Services
--- ------------------------
A. If a sale is consummated with PhoneTel, WCI agrees to pay to M & M for its
services a sum at closing calculated on the basis of the following Xxxxxx
formula:
5% of the first $1 million in Transaction Value, plus;
4% of the second $1 million in Transaction Value, plus;
3% of the third $1 million in Transaction Value, plus;
2% of the fourth $1 million in Transaction Value, plus;
1% of any Transaction Value paid in excess of $4 million
Transaction Value is defined as follows:
The total proceeds and other considerations received (which shall be deemed to
include amounts deferred and/or paid into escrow) by PhoneTel upon the
consummation of the Acquisition (including payments made in installments,
contingent or otherwise), inclusive of cash, securities, notes or other
property (fair market value thereof to be mutually agreed upon) plus the total
value of any liabilities assumed in an asset transaction.
B. Xxxxxx X. Xxxxxxxxxx will represent M & M in meetings with PhoneTel when
specifically requested to do so by authorized representatives of WCI. The
charge for his services will be calculated on the basis of $150 per hour and
will be paid on a monthly basis by WCI upon receipt of M & M's billing.
However, the aggregate paid by WCI for this service, excluding out-of-
pocket expenses, will be applied as a credit against the success fee set
forth in (A) above, along with an additional credit of $47,530 representing
fees billed through March 31, 1995 for services rendered on other related
projects.
IV Disclosure
-- ----------
WCI agrees to provide M & M, among other things, all reasonable information
requested or reasonably required by M & M, including but not limited to
information concerning historical and projected financial results and possible
and known litigious, environmental and other contingent liabilities. WCI will
promptly advise M & M of any material changes in its business or finances
during the term of this agreement. If M & M is requested by WCI to return WCI
prepared information at the end of the Representation Period of this Agreement,
M & M will promptly comply. The provisions of this paragraph IV shall survive
the termination and expiration of this agreement.
V Indemnification
- ---------------
WCI agrees to indemnify M & M and its representatives against any liability,
claim and damage
121
Xxxxxx Xxxxxxxxx, Chairman
May 2, 1995
Page Three
(including attorneys' fees) arising out of the actions, communications,
negotiations, and performance under the terms of this agreement in connection
with PhoneTel or related third parties.
VI Public Notice
-- -------------
WCI authorizes M & M to make public notice, at M & M's expense, of any
transaction concluded under this Agreement. Any such public notice shall be
subject to prior approval of WCI which will not be unreasonably withheld.
VII Entire Understanding
--- --------------------
This Agreement sets forth the entire understanding of the parties relating to
the subject matter hereof and supersedes and cancels any prior communications,
understandings, and agreements between the parties. This Agreement cannot be
modified or changed, nor can any of its provisions be waived except by written
agreement signed by all parties hereto.
VIII Governing Laws and Jurisdiction
---- -------------------------------
This Agreement shall be governed by and construed to be in accordance with the
laws of the State of Missouri applicable to contracts made and to be performed
solely in such State by citizens thereof. Any dispute arising out of this
Agreement shall be adjudicated in the courts of the State of Missouri of
process upon them by registered or certified mail at the addresses shown in
this Agreement shall be deemed adequate and lawful. The parties hereto shall
deliver notices to each other by personal delivery or by registered mail
(return receipt requested) at the addresses set forth above.
IX Acceptance
-- ----------
Please confirm that the foregoing is in accordance with your understanding by
signing on behalf of WCI and by returning an executed copy of this Agreement,
whereupon it shall become a binding agreement between WCI and M & M.
Very truly yours,
Xxxxxx X. Xxxxxxxxxx
Xxxxxx X. Xxxxxxxxxx
Chairman
Accepted and Agreed to:
by SH 5/2/95
--------------------------- ------------------------------
Xxxxxx Xxxxxxxxx Date
000
XXXXXXX X
X.X. XXXXXXXXXX XXX XXXXXXXX XXXXXXXXXX
Xxxxxxxxxx, XX 00000
FORM 10-QSB
(Xxxx One)
X Quarterly report Under Section 13 or 15(d) of the Securities Exchange Act
--- of 1934
For the quarterly period ended June 30, 1995
---------------
Transition report under Section 13 or 15(d) of the Exchange Act
---
For the transition period from to
------------------- ---------------------
Commission file number 0-16715
--------------
PHONETEL TECHNOLOGIES, INC.
-------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in its Charter)
OHIO 00-0000000
---------------------------------- --------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
0000 Xxxxxx Xxxxxx. 000 Xxxxxxx Xxxxxx Xxxxx Xxxxxxxxx, XX 00000-0000
-------------------------------------------------------------------------
(Address of Principal Executive Offices)
(000) 000-0000
-------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: as of August 5, 1995,
----------------------------
10,829,218 shares of the registrant's common stock, $.01 par value, were
------------------------------------------------------------------------------
outstanding.
------------------------------------------------------------------------------
Traditional Small Business Disclosure Format (check one):
Yes X No
----- -----
123
PhoneTel Technologies, Inc.
Form 10-QSB
Quarter Ended June 30, 1995
INDEX
Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets as of June 30, 1995
and December 31, 1994 ................................ 3
Statements of Operations for the
Three Months Ended June 30,
1995 and 1994 ........................................ 4
Statements of Operations for the
Six Months Ended June 30, 1995 and 1994 .............. 5
Statements of Cash Flows for the
Six Months Ended June 30, 1995 and 1994 .............. 6
Notes to Financial Statements......................... 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations......... 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders .. 12
Item 6. Exhibits and Reports on Form 8-K ..................... 13
Signatures........................................... 13
2
124
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PHONETEL TECHNOLOGIES, INC.
BALANCE SHEETS
June 30, December 31,
1995 1994
----------- -----------
(Unaudited)
Assets
Current assets:
Cash $ 357,657 $ 478,756
Accounts receivable, net 795,499 666,339
Inventories 516,086 363,531
Prepaid expenses 69,902 60,139
----------- -----------
Total current assets 1,739,144 1,568,765
Property and equipment, net 4,778,515 4,931,308
Intangibles 2,229,173 2,821,998
Other assets, net 960,042 835,830
----------- -----------
$ 9,706,874 $10,157,901
=========== ===========
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of long-term debt $ 1,666,601 $ 1,814,760
Current portion of obligations under
capital leases 102,126 94,343
Accounts payable 3,089,367 2,239,745
Accrued expenses 762,945 1,089,021
----------- -----------
Total current liabilities 5,621,039 5,237,869
Long-term debt 1,849,915 2,063,896
Obligations under capital leases 205,525 208,269
Total shareholders' equity (Note 3) 2,030,395 2,647,867
----------- -----------
9,706,874 $10,157,901
=========== ===========
NOTE: The balance sheet at December 31, 1994 has been derived from the audited
financial statements at that date, but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
The accompanying notes are an integral part of these financial statements.
3
125
PHONETEL TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Three Months Ended June 30,
----------------------------------
1995 1994
------------ ------------
Revenues:
Coin calls $ 2,664,224 $ 2,198,392
Operator services 1,004,207 1,274,781
Commissions 397,040 664,929
Other 39,276 10,552
------------ ------------
4,104,747 4,148,654
------------ ------------
Costs and expenses:
Line and transmission charges 1,287,084 1,182,393
Location commissions 886,665 859,627
Billing and collection 255,880 256,980
Depreciation and amortization 731,591 663,922
Other operating expenses 775,347 799,437
Selling, general and administrative 869,200 725,555
------------ ------------
4,805,767 4,487,914
------------ ------------
Loss from operations (701,020) (339,260)
Interest expense (116,939) (118,951)
Interest income 6,038 1,178
------------ ------------
Net Loss $ (811,921) $ (457,033)
============ ============
Less: Preferred stock dividend
requirement (77,417) (72,995)
------------ ------------
Net loss applicable to common
shareholders $ (889,338) $ (530,028)
============ ============
Net loss per common share $ (.09) $ (.06)
============ ============
Weighted average number of shares 9,888,345 8,886,743
============ ============
The accompanying notes are an integral part of these financial statements.
4
126
PHONETEL TECHNOLOGIES, INC.
STATEMENTS OF OPERATIONS
(UNAUDITED)
For the Six Months Ended June 30,
---------------------------------
1995 1994
------------ ------------
Revenues:
Coin calls $ 4,995,329 $ 3,399,063
Operator services 2,008,055 2,670,829
Commissions 810,224 777,031
Other 64,454 47,515
------------ ------------
7,878,062 6,894,438
------------ ------------
Costs and expenses:
Line and transmission charges 2,404,149 1,893,381
Location commissions 1,516,365 1,512,980
Billing and collection 513,188 528,858
Depreciation and amortization 1,432,491 898,295
Other operating expenses 1,716,983 1,389,280
Selling, general and administrative 1,494,244 1,354,260
------------ ------------
9,077,420 7,577,054
------------ ------------
Loss from operations (1,199,358) (682,616)
Interest expense (220,230) (176,181)
Interest income 6,588 2,446
------------ ------------
Net Loss $ (1,413,000) $ (856,351)
============ ============
Less: Preferred stock dividend
requirement (154,834) (145,990)
------------ ------------
Net loss applicable to common
shareholders $ (1,567,834) $ (1,002,341)
============ ============
Net loss per common share $ (.16) $ (.12)
============ ============
Weighted average number of shares 9,516,845 8,539,032
============ ============
The accompanying notes are an integral part of these financial statements.
5
127
PHONETEL TECHNOLOGIES, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended June 30,
----------------------------------
1995 1994
----------- ------------
Cash flows provided by (used in)
operating activities:
Net loss $(1,413,000) $ (856,351)
Adjustments to reconcile net loss
to net cash flow from
operating activities:
Depreciation and amortization 1,432,491 898,295
Stock and stock awards issued 61,160 17,500
Changes in assets and liabilities:
Accounts receivable (129,160) (547,338)
Inventories (152,555) (115,698)
Prepaid expenses (9,763) 10,851
Intangibles and other assets (264,296) (267,516)
Accounts payable and accrued expenses 523,546 1,320,426
----------- -----------
48,423 460,169
----------- -----------
Cash flows provided by (used in)
investing activities:
Acquisition of Alpha Pay Phones-IV, L.P. - (2,143,119)
Purchases of property and equipment, net (68,071) (32,880)
----------- -----------
(68,071) (2,175,999)
----------- -----------
Cash flows provided by (used in)
financing activities:
Proceeds from issuance of Common Stock 690,000 1,474,999
Dividends paid (40,375) -
Debt financing costs - (70,000)
Equity financing costs (52,935) (104,689)
Proceeds from warrant and option
exercises 20,000 553,460
Proceeds from debt issuances 200,000 1,400,000
Principal payments on borrowings (918,141) (1,442,307)
----------- -----------
(101,451) 1,811,463
----------- -----------
Increase (decrease) in cash (121,099) 95,633
Cash:
At beginning of period 478,756 83,555
----------- -----------
At end of period $ 357,657 $ 179,188
=========== ===========
The accompanying notes are an integral part of these financial statements.
6
128
PHONETEL TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - Basis of Presentation
==============================================================================
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information. Accordingly. they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. For further information, refer to the Financial Statements
and Notes thereto included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1994.
NOTE 2 - Financial Condition
==============================================================================
On March 25, 1994, the Company acquired substantially all of the assets of
Alpha Pay Phones-IV, L.P. ("Alpha"), a Delaware limited partnership. The
acquired assets included 2,155 installed telephones. This acquisition was
accounted for using the purchase method and, accordingly, the purchase price
was allocated to net assets acquired based on their estimated fair values.
The purchase price was $5,598,874, of which $2,334,216 was paid in cash. To
fund in part the cash payment with respect to the acquisition of assets, the
Company borrowed $1,400,000. The balance of the purchase price was satisfied
by the Company's assumption of obligations of Alpha to U.S. Long Distance, Inc.
("USLD") in the aggregate amount of $2,164,083 and the Company's purchase money
notes to Alpha in the amount of $1,100,620.
At June 30, 1995 the following notes, related to the acquisition of Alpha
assets, were classified as current liabilities:
USLD $ 319,405
Alpha 302,030
Third parties 124,614
----------
$ 746,049
==========
The Company had a working capital deficit of $3,881,895 at June 30,1995
compared to a working capital deficit of $3,669,104 at December 31, 1994, an
increase of $212,791.
The Company is in active negotiations to secure additional commitments for
long-term debt. These additional funds along with ongoing positive cash flows
should be sufficient to assure that the Company can meet its current
obligations and maintain modest sales growth. Management believes, but cannot
assure, it will receive commitments for additional funds.
7
129
The Company's long-term viability. however, is contingent upon either
restructuring its debt, selling off assets, merger with another company or its
ability to raise additional capital. Of these options, it is the intention of
the Company to raise additional capital for restructuring the balance sheet and
allow for additional growth. Growth will add to the likelihood of the long-term
viability of the Company by properly utilizing an asset base and operator and
general administration infrastructure that is currently underutilized.
The Company has the following plans to generate these additional funds. The
Company is in active negotiations with various sources to secure financing. The
Company has received firm commitments from its major pay telephone suppliers to
finance the purchase of 2,000 pay telephones over the next eighteen months at
competitive rates. The Company continues to actively pursue private financing
of the equipment and other costs involved in pay telephone installations and
acquisitions of pay telephone routes. The Company has retained the services of
a financial advisor, Xxxxxxx Securities Corporation, that has committed to a
project of raising new capital for the Company. This capital could be a
combination of senior secured financing, mezzanine financing and/or equity.
This project is actively in progress with the expectation of having the funding
secured by autumn 1995. Management believes, but cannot assure, the capital
funding will be secured.
Management believes, but cannot assure, that cash flows from operations, the
proceeds from the financing discussed above and other financial alternatives
will allow the Company to sustain its operations and meet its obligations
through the third quarter of 1996.
NOTE 3 - Shareholders' Equity
==============================================================================
As of June 30,1995 and December 31, 1994 shareholders' equity consisted of the
following:
June 30, December 31,
1995 1994
--------- ------------
10% Cumulative Redeemable Preferred Stock
($1,000 stated value - 3,880 shares authorized;
1,496 shares issued and outstanding at
June 30, 1995 and December 31, 1994) $ 1 $ 1
8% Cumulative Redeemable Preferred Stock
($100 stated value - 16,000 shares
authorized; 12,200 shares issued and
outstanding at June 30, 1995 and
December 31, 1994) 981,084 981,084
7% Cumulative Convertible Redeemable Preferred
Stock ($100 stated value - 2,500 shares
authorized, issued and outstanding at
June 30, 1995 and December 31, 1994) 200,000 200,000
Common Stock ($0.01 par value - 22,500,00
shares authorized; 10,391,585 and 9,132,940
shares issued and outstanding at June 30, 1995
and December 31, 1994) 103,914 91,328
Additional paid-in capital 9,502,575 8,679,258
Accumulated deficit (8,757,179) (7,303,804)
---------- -----------
$ 2,030,395 $ 2,647,867
=========== ===========
8
130
The following transactions occurred during the six month period ended June 30,
1995 increasing shareholders' equity.
In March 1995, options to purchase 20,000 shares of the Company's Common Stock
were exercised. Proceeds from this option exercise were used to reduce amounts
owed by the Company for equity financing costs.
In May, the Company sold 825,000 shares of unregistered Common Stock in private
sales. Proceeds from the sales were $690,000.
In other equity transactions, 30,000 shares of the Company's Common Stock were
issued as consideration for services, and 45,200 shares of Common Stock were
issued under the Executive Incentive Plan, in lieu of cash payments.
All of the stock transactions reported were made at what the Company believed
to be the fair market value on the date the contractual obligations were
entered into.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
On March 25, 1994, the Company acquired substantially all of the assets of
Alpha Pay Phones-IV, L.P. ("Alpha"), a Delaware limited partnership. The
acquired assets included 2,155 installed telephones. This acquisition was
accounted for using the purchase method and, accordingly, the purchase price
was allocated to net assets acquired based on their estimated fair values.
The purchase price was $5,598,874, of which $2,334,216 was paid in cash. To
fund in part the cash payment with respect to the acquisition of assets, the
Company borrowed $1,400,000. The balance of the purchase price was satisfied by
the Company's assumption of obligations of Alpha to U.S. Long Distance, Inc.
("USLD") in the aggregate amount of $2,164,083 and the Company's purchase money
notes to Alpha in the amount of $1,100,620.
At June 30, 1995 the following notes, related to the Acquisition of Alpha
assets, were classified as current liabilities:
USLD $ 319,405
Alpha 302,030
Third parties 124,614
----------
$ 746,049
==========
The Company had a working capital deficit of $3,881,895, at June 30,1995
compared to a working capital deficit of $3,669,104 at December 31, 1994, an
increase of $212,791.
The Company is in active negotiations to secure additional commitments for
long-term debt. These additional funds along with ongoing positive cash flows
should be sufficient to assure that the Company can meet its current
obligations and maintain modest sales growth. Management believes, but cannot
assure, it will receive commitments for additional funds.
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The Company's long-term viability, however, is contingent upon either
restructuring its debt, selling off assets, merging with another company or its
ability to raise additional capital. Of these options, it is the intention of
the Company to raise additional capital for restructuring the balance sheet and
allow for additional growth. Growth will add to the likelihood of the long-term
viability of the Company by properly utilizing an asset base and operator and
general administration infrastructure that is currently underutilized.
The Company has the following plans to generate these additional funds. The
Company is in active negotiations with various sources to secure financing. The
Company has received firm commitments from its major pay telephone suppliers to
finance the purchase of 2,000 pay telephones over the next eighteen months at
competitive rates. The Company continues to actively pursue private financing
of the equipment and other costs involved in pay telephone installations and
acquisitions of pay telephone routes. The Company has retained the services of
a financial advisor, Xxxxxxx Securities Corporation, that has committed to a
project of raising new capital for the Company. This capital could be a
combination of senior secured financing, mezzanine financing and/or equity.
This project is actively in progress with the expectation of having the funding
secured by autumn 1995. Management believes, but cannot assure, the capital
funding will be secured.
Management believes, but cannot assure, that cash flows from operations, the
proceeds from the financing discussed above and other financial alternatives
will allow the Company to sustain its operations and meet its obligations
through the third quarter of 1996.
Results of Operations
At June 30, 1995 the Company had approximately 5,038 Company owned pay
telephones installed and 21 phones owned by others at various locations, but
managed by the Company under its national and regional account management
programs, compared to 4,481 Company owned pay telephones and 127 managed phones
at June 30, 1994. Additionally, at June 30,1995 the Company provided long
distance operator service to approximately 4,500 pay telephones (including
Company-owned phones) and hotel and hospital room phones compared to
approximately 7,193 telephones as of June 30, 1994.
Revenue
Revenue from coin calls increased 21% for the quarter to $2,664,224 in 1995
from $2,198,392 for the same period in 1994. Revenues from coin calls increased
approximately 47% for the six months ended June 30, 1995 to $4,995,329 from
$3,399,063 in 1994. These increases are primarily attributable to an increase
in the average number of pay telephones in service to 5,001 for the three
months ended June 30, 1995 from 4,445 for the comparable period in 1994 and to
4,938 for the first half of 1995 from 3,360 for the comparable period in 1994.
Revenues per phone have also increased as a result of management's program to
isolate and redeploy low revenue and/or unprofitable phones to higher revenue
producing sites.
Operator service revenue decreased 21% for the quarter ended June 30, 1995 to
$1,004,207 from $1,274,781 in 1994, and decreased 25% for the six months ended
June 30, 1995 to $2,008,055 from $2,670,829 in 1994. These decreases were
primarily the result of a decrease in the number of phones to which the Company
provides operator services through presubscription arrangements and aggressive
dial-around advertising of AT&T, Sprint and MCI. The Company expects that the
revenues will stabilize in 1995.
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Commission revenue decreased to $397.040 for the quarter ended June 30, 1995
from $664.929 for the comparable period in 1994. Commission revenue increased
slightly for the six months ended June 30, 1995 to $810,224 from $777,031 for
the comparable period in 1994. The decrease in commission revenue for the
quarter is attributable to a decrease in the commissions paid by USLD. USLD
provides operator services to the telephones acquired from Alpha and pays the
Company a commission. The number of telephones for which USLD provides operator
service has decreased due to management's program of isolating low revenue
and/or unprofitable phones and redeploying them to higher revenue sites.
Operator service usage for these telephones has also decreased due to the
introduction of a Company program which charges customers $0.75 in coin for a
three minute, long distance call anywhere in the continental United States,
thus diverting operator assisted calling. Also, aggressive dial-around
advertising by AT&T, Sprint and MCI has contributed to this decrease.
Costs and Expenses
Line and transmission charges increased to 31.4% of total revenue for the
quarter and 30.5% for the six months ended June 30, 1995 compared to 28.5% and
27.5% for the comparable period in 1994 as a result, in part, from increased
coin revenue from the $0.75 per three minute long distance program as well as
increases in certain local telephone company line charges. Management expects
that the increased volume on the $0.75 per three minute long distance calls
program will cause the line and transmission charges, as a percent of revenue,
to remain steady or increase slightly in the future. However, this program
reduces billing and collection and operator service costs.
Location commissions have remained relatively constant at approximately 21% of
total revenue for the quarters ended March 31, 1995 and 1994. Location
commissions decreased to 19.3% of total revenue for the six months ended June
30,1995 as compared to 21.9% for the comparable period in 1994 as a result of
renegotiating the location agreements acquired from the Alpha acquisition.
Location commissions may increase in the future due to increased competition,
however, such costs, as a percentage of total revenues, should stabilize as the
industry matures.
Billing and collection costs have remained constant at 6.2% of total revenue
for the quarters ended March 31,1995 and 1994, while decreasing to 6.5% of
total revenue for six months ended June 30,1995 from 7.7% for the comparable
period in 1994 primarily due to the introduction of new system software and
procedures which help manage costs and control expenses. Billing and collection
costs are expected to remain constant as a percentage of total revenue or
perhaps decrease as the volume of the $0.75 per three minute long distance coin
calls increase since these do not require billing and collection.
Depreciation and amortization increased to $731,591 for the quarter ended June
30, 1995 from $663,922 in 1994, and increased to $1,432,491 for the six month
period ended June 30,1995 from $898,295 in 1994. This increase was primarily
due to the Company's acquisition of Alpha assets at the end of the first
quarter 1994 and expansion of its pay telephone base which included purchases
of additional computer equipment, service vehicles and software which were made
to accommodate the Company's growth.
Other operating expenses as a percent of total revenue have remained constant
at 19% for the quarters ended June 30, 1995 and 1994, and increased slightly to
21.8% for the six months ended June 30, 1995 from 20.2% for the comparable
period in 1994. The increase for the first half of 1995 is attributable to the
addition of the Alpha assets, new operations in Texas, the establishment of
Florida and Nevada sales offices, an increase in the Company's pay telephone
base and additional personnel to accommodate increased business. Total
operating expenses are expected to remain stable in the foreseeable future and
are expected to decrease as a percentage of total revenues.
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Selling, general and administrative expenses increased to 21.2% of total
revenue for the quarter ended June 30, 1995 from 17.5% for the comparable
period in 1994, and remained constant at approximately 19% for the first half
of 1995 compared to 1994. The increase for the quarter is partially due to the
payment certain of executive bonuses, and increased marketing and sales
efforts. The Company has begun a program to reduce selling, general and
administrative expenses.
Interest expense decreased to $116,939 for the quarter ended June 30, 1995 from
$118,951 for the comparable period in 1994. For the six months ended June 30,
1995, interest expense increased to $220,230 from $176,181 for the comparable
period in 1994 due to financing obtained for the Alpha acquisition.
Impact of Seasonality
The seasonality of the Company's revenues from installed pay telephones,
reselling operator assisted long distance services, and national and regional
account management parallels that of the location from which the calls are
placed. Since a large concentration of these telephones are in shopping malls,
the greatest portion of the Company's revenue is earned in the fourth quarter
due to the increased holiday traffic.
Impact of Inflation
Inflation has not had a significant impact on the Company. It is possible that
during inflationary periods, the basic line charges may increase while public
utilities commissions or the Federal Communications Commission may not allow
increases in charges to customers.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Shareholders held on June 30,1995, the shareholders of
record on May 15, 1995, approved election to the Company's Board of Directors
as follows: Xxxxx X. Xxxxxx (5,483,693 affirmative votes and 1,323,379 votes
against), Xxxxxx X. Xxxxx (6,637,114 affirmative votes and 169,958 votes
against), Xxxxxxx Xxxxxx (5,485,693 affirmative votes and 1,321,379 votes
against), Xxxxx Xxxxxxx (6,588,612 affirmative votes and 218,460 votes against)
and Xxxxxx X. Xxxx (6,637,114 affirmative votes and 169,958 votes against).
Also, approved (5,423,683 affirmative votes, 1,280,325 votes against and 99,064
votes abstaining) was an amendment to the Articles of Incorporation providing
far a reverse split of the Company's Common Stock whereby six shares shall be
changed into one share. The Board of Directors shall, at its discretion, cause
this amendment to become effective subsequent to such time as the Board of
Directors has determined that the reverse stock split would assist the Company
in increasing the marketability of its Common Stock.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
None
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
PHONETEL TECHNOLOGIES, INC.
Date: August 5, 1995 /s/ Xxxxxx X. Xxxx
-------------------------
Xxxxxx X. Xxxx
Senior Vice President and
Chief Financial Officer
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EXHIBIT P
XXXXXXX SECURITIES
CORPORATION
Xxx Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
(000) 000-0000 Tel
(000) 000-0000 Fax
April 20, 1995
Xx. Xxxxxx X. Xxxx
Chief Financial Officer
PhoneTel Technologies, Inc.
000 Xxxxxxx Xxxxxx Xxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Dear Xx. Xxxx:
This letter confirms our understanding that PhoneTel Technologies,
Inc. (the "Company") has engaged Xxxxxxx Securities Corporation ("Xxxxxxx") to
act as its exclusive financial advisor with respect to a potential merger
with., or acquisition of (the "Transaction") World Communications, Inc. (the
"Target")
The following services will be provided by Xxxxxxx pursuant to this
engagement:
- Analysis and valuation of the terms of the. Transaction, it
being understood that Xxxxxxx will rely entirely upon
information provided by the Company and the Target and their
respective officers, directors, accountants and counsel which
Xxxxxxx deems appropriate, without any independent
investigation or verification thereof; and
- Assistance in structuring and negotiating the Transaction.
The Company will compensate Xxxxxxx for its role as financial
advisor as follows:
(a) if during the term of this Agreement or 12 months after
termination of this Agreement as discussed below, a
Transaction is consummated, the Company agrees to pay Xxxxxxx,
at the time of the closing of the Transaction (the "Closing"),
a transaction fee (the "Transaction Fee") equal to $250,000
cash and warrants (the "Warrants") to purchase a number of
shares of the surviving entity's Common Stock that equals 5%
of the number of shares outstanding on a fully diluted basis,
after giving effect to the
136
Transaction and the exercise of the Warrants. The Warrants
shall be exercisable at any time during the 5 year period from
date of issuance at an exercise price equal to the fair market
value of the Company's Common Stock at the time of the
issuance. The Warrants shall contain reasonable "piggyback"
and "demand" registration rights and may be assigned in whole
or in part to the employees and affiliates of Xxxxxxx.
(b) Reimbursement periodically for all reasonable out-of-pocket
expenses incurred in connection with its role hereunder,
including, without limitation, reasonable attorneys' fees and
disbursements, and the fees and disbursements of any other
advisor retained by Xxxxxxx with the prior approval of the
Company.
No advice rendered by Xxxxxxx, whether formal or informal, may be
disclosed in whole or in part, or summarized, excerpted from or otherwise
publicly referred to, without Xxxxxxx'x prior written consent In addition,
Xxxxxxx may not be otherwise publicly referred to without their prior written
consent unless such public reference is, in your opinion, legally required.
Since Xxxxxxx will be acting on behalf of the Company in connection
with its engagement hereunder, the Company has entered into a separate letter
agreement attached hereto, providing for the indemnification by the Company of
Xxxxxxx and certain related entities.
As you know, Xxxxxxx is a full service securities firms and as such
may from time to time effect transactions, for its own account or the account
of customers, and hold positions in securities or options on securities of the
Company.
As is conventional in such transactions, Xxxxxxx will be engaged by
the Company during the term hereof, and will be entitled to the Transaction Fee
referred to in paragraph (a) in the event of a Transaction even if the Company
approaches the Target during the term hereof directly or through an
intermediary other than Xxxxxxx. Xxxxxxx'x engagement hereunder may be
terminated at any time with or without cause by either Xxxxxxx or the Company
upon 10 days' written notice thereof to the other party; provided, however,
that Xxxxxxx will continue to be entitled to (i) the full amount of the
Transaction Fee pursuant to the terms and conditions set forth in paragraph (a)
above in the event that at any time prior to the expiration of 12 months after
such termination, a Transaction is consummated, (ii) the fees and expenses to
the extent provided in paragraph (b) above, and (iii) indemnification of
Xxxxxxx and certain related entities with respect to actions and omissions
occurring prior to such termination as provided in the separate letter
agreement referred to above.
We are delighted to accept this engagement and look forward to
working with you on this assignment. P[ease confirm that the foregoing is in
accordance with
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your understanding by signing and returning to us the enclosed duplicate of
this Agreement.
Very truly yours,
XXXXXXX SECURITIES
CORPORATION
By:
-----------------------
Name:
Title:
Accepted and Agreed to:
PHONETEL TECHNOLOGIES, INC.
By: /s/ Xxxxxx Xxxx
-----------------------
Name: XXXXXX XXXX
Title: SUP & CFO
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EXHIBIT Q
REGISTRATION RIGHTS AGREEMENT
-----------------------------
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") made and entered
into this 22nd day of September, 1995, by and between PhoneTel Technologies,
Inc., an Ohio corporation ("PhoneTel") and World Communications, Inc., a
Missouri corporation ("WCI").
WHEREAS, PhoneTel and WCI are parties to the Agreement and Plan of
Merger of even date herewith (the "Merger Agreement") pursuant to which WCI will
merge with and into a wholly owned subsidiary of PhoneTel (the "Merger") and the
shareholders of WCI will receive shares of PhoneTel common stock $.01 par value
("PhoneTel Common Shares") and 10% Non-Voting Preferred Stock, without par
value, $100 stated value, of PhoneTel ("PhoneTel Preferred Shares"); and
WHEREAS, the shareholders of WCI 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, (ii) issuable
upon conversion of the PhoneTel Preferred Shares and (iii) 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
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with the intended method or methods of distribution thereof; PROVIDED, HOWEVER,
that PhoneTel's obligations under this 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 "Piggy-back
Registration"), PhoneTel will give prompt
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140
written notice (in any event within five business days
after its receipt of notice of any exercise of 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, ocher securities requested to be
included in such registration.
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(d) Nothing in this Section 3 will prohibit PhoneTel
from determining, at any time, not to file a registration
statement or, if filed, 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
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made in reliance on and in conformity with information with respect to such
indemnified party furnished in writing to PhoneTel by such indemnified 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 Registrartion 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
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and in conformity with information with respect to such holder furnished
in writing to PhoneTel by such 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) com pletes and executes all questionnaires, powers of attor-
ney, 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 require ment 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
8
146
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 WCI,
PhoneTel and the shareholders of WCI 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 WCI 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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147
13. HEADINGS. The 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.
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 WCI:
World Communications, Inc.
00000 Xxxxxxx Xxxx Xxxx
Xx. Xxxxx, XX 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Attn: Xxxxxx Xxxxxxxxx
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with copy to:
Xxxxxxxxxx, Xxxxxx & Xxxxxxxxx, P.C.
000 Xxxxx Xxxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Attn: Xxxx X. Xxxxxxxx, 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
on the day and year first above written.
WORLD COMMUNICATIONS, INC.
By:
--------------------------------
Xxxxxx Xxxxxxxxx, Chairman
PHONETEL TECHNOLOGIES, INC.
By:
--------------------------------
Name:
Title:
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150
BYLAWS
OF
NORTHERN FLORIDA TELEPHONE CORPORATION
ARTICLE I
---------
Offices
-------
The principal office of the Corporation shall be located at 0000 X.X.
00xx Xxxxxx, Xxxxx X, Xxxxx, Xxxxxxx 00000.
ARTICLE Il
----------
Shareholders
------------
SECTION 2.01. PLACE OF MEETING. All meetings of the Shareholders shall be
held at the office of the Corporation or at such other place within or without
the State of Florida as may be designated by the President or the Board of
Directors.
SECTION 2.02. ANNUAL MEETING. Unless otherwise designated by the Board of
Directors, the annual meeting of Shareholders, commencing with the year 1995,
shall be held on the first Monday in June of each year if not a legal holiday,
and if a legal holiday, then the day following, at 10:00 a.m., for the election
of Directors and for the transaction of such other business as shall properly
come before' the meeting.
SECTION 2.03. SPECIAL MEETINGS. Special meetings of the Shareholders for
any purpose or purposes may be called by the President or by the Board of
Directors, or by the Secretary at the request in writing by Shareholders owning
at least one-fifth (1/5) in amount of the entire capital stock of the
Corporation issued and outstanding.
SECTION 2.04. NOTICE OF MEETINGS. Written or printed notice of
Shareholders' meetings shall be given in accordance with the laws of the State
of Florida.
SECTION 2.05. SHAREHOLDERS ENTITLED TO VOTE. The Board of Directors may
prescribe a period not exceeding fifty (50) days prior to any meeting of the
Shareholders during which no transfer of stock on the books of the Corporation
may be made. The Board of Directors may fix a day not more than fifty (50) days
prior to the holding of any meeting of the Shareholders as the day as of which
Shareholders are entitled to notice of and to vote at such meeting.
SECTION 2.06. QUORUM. The holders of a majority of the stock issued and
outstanding, present in person or represented by
151
proxy, shall be requisite and shall constitute a quorum at all meetings of the
Shareholders for the transaction of business except as otherwise provided by
law, by the Articles of Incorporation or by these Bylaws.
SECTION 2.07. VOTING. At each meeting of the Shareholders, every
Shareholder shall be entitled to vote in person, or by proxy appointed by an
instrument in writing subscribed by such Shareholder, or by his duly authorized
attorney, and he shall have one vote for each share of stock registered in his
name at the time of the closing of the transfer books for said meeting, or in
lieu of closing of the transfer books the record date for voting as fixed by
the Board of Directors.
The vote of the holders of a majority of the stock having voting power
present in person or represented by proxy shall decide any question brought
before such meeting, unless the question is one upon which by express provision
of the statutes or of the Articles of Incorporation a different vote is
required, in which case such express provision shall govern and control the
decision of such question. In voting for Directors of the Corporation,
cumulative voting shall not be permitted.
SECTION 2.08. INFORMAL MEETINGS. Whenever the vote of Shareholders at a
meeting thereof is required or permitted to be taken in connection with any
corporate action by any provisions of the statutes or of the Articles of
Incorporation, the meeting, any notice thereof and vote of Shareholders thereat
may be dispensed with if all the Shareholders who would have been entitled to
vote upon the action if such meeting were held shall consent in writing to such
corporate action being taken. Such written consent shall be filed with the
minutes of Shareholders' meetings.
SECTION 2.09. ORGANIZATION. The President, and in his absence, the Vice
President, and in the absence of both the President and the Vice President, a
chairman chosen by the Shareholders present, shall preside at each meeting of
Shareholders and shall act as chairman thereof. The Secretary, and in his
absence the Assistant Secretary, and in the absence of both the Secretary and
the Assistant Secretary, a Secretary pro tem, chosen by the Shareholders
present, shall act as Secretary of all meetings of the Shareholders.
SECTION 2.10. ADJOURNMENT. If at any meeting of the Shareholders a
quorum shall fail to attend at the time and place for which the meeting was
called or if the business of such meeting shall not be completed, the
Shareholders present in person or represented by proxy may, by a majority vote,
adjourn the meeting from day to day or from time to time, not exceeding ninety
(90) days from such adjournment without further notice until a quorum shall
attend or the business thereof shall be completed. At any such adjourned
meeting any business may be transacted which might have been transacted at the
meeting as originally called.
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ARTICLE III
-----------
Directors
---------
SECTION 3.01. GENERAL POWERS. The business and affairs of the
Corporation shall be managed by its Board of Directors.
SECTION 3.02. NUMBER, ELECTION AND TERM. The number of Directors of the
Corporation shall be seven (7) who shall be elected at the annual meeting of the
Shareholders for a term of one year, and who shall hold office until their
successors have been elected and have qualified. The number of Directors may be
increased or diminished from time to time but shall not be less than two (2).
SECTION 3.03. REGULAR MEETINGS. A regular meeting of the Board of
Directors shall be held without other notice than this Bylaw, immediately after,
and at the same place as, the annual meeting of Shareholders.
SECTION 3.04. VACANCIES. Vacancies and newly created Directorships
resulting from any increase in the authorized number of Directors may be filled
by a majority of the Directors then in office, though less than a quorum, and
the Directors so chosen shall hold office until the next annual election and
until their successors are duly elected and shall qualify, unless sooner
displaced.
SECTION 3.05. PLACE OF MEETING. Meetings of the Board of Directors of
the Corporation, both regular and special, may be held at any place either
within or without the State of Florida, and unless otherwise designated as
herein provided, shall be held at the office of the Corporation.
SECTION 3.06. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held at such time and place as shall from time to time be
determined by resolution of the Board.
SECTION 3.07. NOTICE OF REGULAR MEETINGS. After the time and place of
regular meetings shall have been determined, no notice of any regular meetings
need be given. Notice of any change in the date or place of holding any regular
meeting or any adjournment of a regular meeting shall be given by mail or
facsimile not less than forty-eight (48) hours before such meeting to all
Directors.
SECTION 3.08. SPECIAL MEETINGS. Special meetings of the Board for any
purpose or purposes may be called by the President on two (2) days' notice to
each Director either personally or by mail or by telegram. Upon like notice, the
Secretary of the Corporation, upon the written request of a majority of the
Directors, shall call a special meeting of the Board. Such request shall state
the purpose or purposes of the
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153
proposed meeting. The Officer calling the special meeting may designate the
place for holding same.
SECTION 3.09. QUORUM. At all meetings of the Board, a majority of the
Directors shall constitute a quorum for the transaction of business and the act
of a majority of the Directors present at any meeting at which there is a quorum
shall be the act of the Board of Directors, except where otherwise provided by
law or by these Bylaws. If a quorum shall not be present at any meeting of the
Board of Directors, the Directors present thereat may adjourn the meeting from
time to time without notice other than announcement at the meeting until a
quorum shall be present.
SECTION 3.10. INFORMAL MEETINGS. Whenever the vote of Directors to be
taken in connection with any corporate action is permitted by any provisions of
the Laws of the State of Florida to be taken by written consent it shall be
approved if the requisite number of Directors shall consent in writing to such
corporate action being taken. Such written consent shall be filed with the
minutes of the Board.
SECTION 3.11. COMMITTEES OF DIRECTORS. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees each committee to consist of two or more of the Directors of the
Corporation, which, to the extent provided in the resolution, shall have and may
exercise the powers of the Board of Directors in the management of the business
and affairs of the Corporation and may authorize the seal of the Corporation to
be affixed to all papers which may require it. Such committee or committees
shall have such name or names as may be determined from time to time by
resolution adopted by the Board of Directors. Each committee shall keep regular
minutes of its meetings and report the same to the Board of Directors when
required.
SECTION 3.12. ORGANIZATION. The President, and in his absence a Vice
President, and in the absence of the President and all the Vice Presidents, a
Chairman pro tem, chosen by the Directors present shall preside at each meeting
of the Directors and shall act as Chairman thereof. The Secretary, and in his
absence, the Assistant Secretary, and in the absence of the Secretary and the
Assistant Secretary, a Secretary pro tem, chosen by the Directors present shall
act as Secretary of all meetings of the Directors.
SECTION 3.13. MINUTES AND STATEMENTS. The Board of Directors shall cause
to be kept a complete record of their meetings and acts, and of the proceedings
of the Shareholders.
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ARTICLE IV
----------
Officers
--------
SECTION 4.01. OFFICERS. The Officers of this Corporation shall be a
President, a Secretary and a Treasurer; the Board of Directors may also from
time to time elect one or more Vice Presidents, one or more Assistant
Secretaries and one or more Assistant Treasurers; all of whom shall be chosen by
the Board of Directors. Any person may hold two or more offices.
SECTION 4.02. SUBORDINATE OFFICERS AND EMPLOYEES. The Board of Directors
may appoint such other Officers and agents as it may deem necessary who shall
hold their offices for such terms and shall exercise such powers and perform
such duties as shall be determined from time to time by the Board.
SECTION 4.03. COMPENSATION. The Board of Directors may from time to
time, in its discretion, fix or alter the compensation of any Officer or agent.
SECTION 4.04. ELECTION AND TERM OF OFFICE. The Officers of the
Corporation shall be elected annually by the Board of Directors at the regular
annual meeting of the Board of Directors. Each Officer shall hold office until
his successor shall have been duly elected and shall have qualified or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided. Any Officer or agent elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever in its judgment the
best interests of the Corporation would be served thereby. A vacancy in any
office because of death, resignation, removal, disqualification or otherwise,
may be filled by the Board of Directors for the unexpired portion of the term at
any meeting of the Board.
SECTION 4.05. PRESIDENT. The President shall be the chief executive
officer of the Corporation. He shall preside at all meetings of the Shareholders
and Directors. He shall have general and active management of the business of
the Corporation and shall see that all orders and resolutions of the Board of
Directors are carried into effect, subject, however, to the right of the Board
of Directors by resolution to delegate any specific powers (other than those
which may be by statute exclusively conferred upon the President), to any other
Officer, Director or agent of the Corporation. The President shall, on behalf of
the Corporation and as authorized by the Board of Directors, execute all deeds,
notes, bonds, mortgages, contracts and other instruments in writing, except
where the signing and execution thereof shall be expressly delegated by the
Board of Directors to some other Officer or agent of the Corporation. He may
vote all securities which the Corporation is entitled to vote except as and to
the extent such authority shall be vested in a different Officer or agent of the
Corporation by the Board of Directors.
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SECTION 4.06. VICE PRESIDENT. The Vice Presidents, in the order
designated by the Board of Directors, shall, in the absence or disability of the
President, perform the duties and exercise the powers of the President and shall
perform such other duties and have such other powers as the Board of Directors
or the President may from time to time prescribe.
SECTION 4.07. THE SECRETARY. The Secretary shall attend all meetings of
the Shareholders of the Corporation and of the Board of Directors and shall
record all of the proceedings of such meetings in minute books kept for that
purpose. He is authorized to affix the corporate seal to all instruments
requiring it. He shall have charge of the corporate records, and, except to the
extent authority may be conferred upon any transfer agent or registrar duly
appointed by the Board of Directors, he shall maintain the Corporation's books,
registers, stock certificate and stock transfer books and stock ledgers, and
such other books, records and papers as the Board of Directors may from time to
time entrust to him. He shall give or cause to be given proper notice of all
meetings of Shareholders and Directors as required by law and the Bylaws, and
shall perform such other duties as may from time to time be prescribed by the
Board of Directors or the President.
SECTION 4.08. THE ASSISTANT SECRETARY. Each Assistant Secretary shall
assist the Secretary in the performance of his duties, and may at any time
perform any of the duties of the Secretary; in case of the death, resignation,
absence or disability of the Secretary, the duties of the Secretary shall be
performed by an Assistant Secretary, and each Assistant Secretary shall have
such other powers and perform such other duties as, from time to time, may be
assigned to him by the Board of Directors.
SECTION 4.09. THE TREASURER. The Treasurer shall have the custody of the
corporate funds and securities, and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation, and shall
deposit all monies and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board, taking proper vouchers for such disbursements, and shall render to
the President and Directors at the regular meetings of the Board, or whenever
they may require it, an account of all his transactions as Treasurer, and of the
financial conditions of the Corporation.
SECTION 4.10. THE ASSISTANT TREASURER. Each Assistant Treasurer shall
assist the Treasurer in the performance of his duties, and may at any time
perform any of the duties of the Treasurer; in case of the death, resignation,
absence or disability of the Treasurer, the duties of the Treasurer shall be
performed by an Assistant Treasurer, and each Assistant Treasurer shall have
such other powers and perform such other duties as, from time to time, may be
assigned to him by the Board of Directors.
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ARTICLE V
---------
Resignations
------------
Any Director or Officer may resign his office at any time, such
resignation to be made in writing and to take effect from the time of its
receipt by the Corporation, unless some time be fixed in the resignation, and
then from that time. The acceptance of a resignation shall not be required to
make it effective.
ARTICLE VI
----------
Contracts and Loans
-------------------
SECTION 6.01. CONTRACTS. The Board of Directors may authorize any Officer
or Officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances.
SECTION 6.02. LOANS. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
ARTICLE VII
-----------
Certificates for Shares and Their Transfer
------------------------------------------
SECTION 7.01. CERTIFICATES FOR SHARES. Certificates representing shares
of the Corporation shall be in such form as may be determined by the Board of
Directors. Such certificates shall be signed by the President or Vice
President and by the Secretary or an Assistant Secretary and shall be sealed
with the seal of the Corporation. All certificates for shares shall be
consecutively numbered. The name of the persons owning the shares represented
thereby with the number of shares and date of issue shall be entered on the
books of the Corporation. All certificates surrendered to the Corporation for
transfer shall be cancel led and no new certificate shall be issued until the
former certificate for a like number of shares shall have been surrendered and
cancelled, except that in case of a lost, destroyed or mutilated certificate a
new one may be issued therefor upon such terms and indemnity to the Corporation
as the Board of Directors may prescribe. The Corporation shall keep at its
registered office or principal place of business a record of its Shareholders,
giving the names and addresses of all Shareholders and the number of shares
held by each.
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157
SECTION 7.02. TRANSFERS OF SHARES. Transfers of shares of the Corporation
shall be made only on the books of the Corporation by the registered holder
thereof or by his attorney thereunto authorized by a power of attorney duly
executed and filed with the Secretary of the Corporation, and on surrender for
cancellation of the certificate for such shares. The person in whose name
shares stand on the books of the Corporation shall be deemed the owner thereof
for all purposes as regards the Corporation.
ARTICLE VIII
------------
Dealings with Companies in Which
--------------------------------
Directors May Have an Interest
------------------------------
Inasmuch as the Directors of this Corporation are or may be men of
diversified business interests, and are likely to be connected with other
corporations with which from time to time this Corporation may have business
dealings, no contract or other transaction between this Corporation and any
other corporation shall be affected by the fact that Directors of this
Corporation are interested in, or are directors or officers of such other
corporation.
ARTICLE IX
----------
Miscellaneous Provisions
------------------------
SECTION 9.01. FISCAL YEAR. The fiscal year of the Corporation shall be
determined by the Board of Directors.
SECTION 9.02. INSPECTION OF BOOKS. The Directors shall determine from
time to time whether, and, if allowed, when and under what conditions and
regulations the accounts and books of the Corporation (except such as may by
statute be specifically open to inspection) or any of them shall be open to
inspection of the Shareholders, and Shareholders' rights in this respect are and
shall be restricted and limited accordingly.
SECTION 9.03. CHECKS AND NOTES. All checks and drafts on the
Corporation's bank accounts and all bills of exchange and promissory notes, and
all acceptances, obligations and other instruments for the payment of money,
shall be signed by such Officer or Officers or agent or agents as shall be
thereunto duly authorized from time to time by the Board of Directors; provided,
that checks drawn on the Corporation's payroll, dividend and special accounts
may bear the facsimile signatures, affixed thereto by a mechanical device, of
such Officers or agents as the Board of Directors may authorize.
SECTION 9.04. DIVIDENDS. The Board of Directors shall declare such
dividends as they in their discretion see fit whenever the condition of the
Corporation, in their
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158
opinion, shall warrant the same; subject to the provisions of the Florida
Statutes. The Board may declare dividends in cash, in properly or in capital
stock.
SECTION 9.05. NOTICES. Whenever, under the provisions of these Bylaws
notice is required to be given to any Director, Officer or Shareholder, it shall
not be construed to mean personal notice, but such notice may be given in
writing by depositing the same in the post office or letter box, in a postpaid
sealed wrapper addressed to such Shareholder, Officer or Director at such
address as appears on the records of the Corporation, and such notice shall be
deemed to be given at the time when the same shall be thus mailed.
SECTION 9.06. SEAL. The Corporation may have a seal inscribed with the
name of the Corporation and its state of incorporation.
ARTICLE X
---------
Indemnification
---------------
SECTION 10.01. MANDATORY INDEMNIFICATION. The Corporation shall, to the
full extent permitted or authorized by current or future legislation, indemnify
any person who was or is a party or threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
was a Director or Officer of the Corporation or is or was serving at the request
of the Corporation as a director or officer of any other corporation or
enterprise. Such right of indemnification shall inure to the benefit of the
heirs, executors, administrators and personal representatives of such a person.
SECTION 10.02. PERMISSIVE SUPPLEMENTARY BENEFITS. The Corporation may,
but shall not be required to, supplement the right of indemnification under
Section 10.01 by (a) the purchase of insurance on behalf of any one or more of
such persons, whether or not the Corporation would be obligated to indemnify
such person under Section 10.01, (b) individual or group indemnification
agreements with any one or more of such persons and (c) advances for related
expenses of such a person.
SECTION 10.03. AMENDMENT. This Article X may be amended or repealed only
by a vote of the Shareholders and not by a vote of the Board of Directors.
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159
ARTICLE XI
----------
Amendments
----------
These Bylaws may be altered, amended or repealed and new Bylaws may be
adopted by the Board of Directors or by the Shareholders at any annual or
special meeting.
ARTICLE XII
-----------
Construction
------------
When used herein, the male gender shall include the female gender and
the plural shall include the singular as is appropriate.
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160
AMENDMENT TO AGREEMENT
AND PLAN OF MERGER
This Amendment to Agreement and Plan of Merger is entered
into as of this 22nd day of September, 1995, by and among
PHONETEL TECHNOLOGIES, INC., an Ohio corporation ("PhoneTel")
PHONETEL II, INC., a Missouri corporation ("Buyer"), WORLD
COMMUNICATIONS, INC., a Missouri corporation ("World"), and WCI
II, INC,., a Missouri corporation ("WCI").
WHEREAS, PhoneTel, Buyer and World entered into that certain
Agreement and Plan of Merger (the "Merger Agreement") of even
date herewith whereby World merged with and into Buyer (the
"Merger"); and
WHEREAS, prior to the Merger, World acquired an interest in
and to IPTA, L.L.C., an Illinois Limited Liability Company (the
"LLC") pursuant to a subscription Agreement and Operating
Agreement dated as of September 20, 1995 (collectively, the "LLC
Documents"); and
WHEREAS, World's interest in the LLC is subject to certain
restrictions on the transferability of such interest; and
WHEREAS, the Merger Agreement provides for World to transfer
all of its right, title and interest in and to the LLC to Buyer;
and
WHEREAS, PhoneTel, Buyer and World believe that it is in the
best interest of each of them that the interest in the LLC not be
transferred until such time as the members of the LLC consent to
the transfer pursuant to the terms of the LLC Documents; and
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161
WHEREAS, after the closing of the Merger, WCI was formed
by all of the former shareholders of World for purpose of
retaining any asset not transferred by the Merger, including
certain contract rights pursuant to a Security Agreement executed
in connection with the Merger.
NOW, THEREFORE, the parties agree as follows:
1. Buyer and PhoneTel hereby waive any right or claim
under or pursuant to the Merger Agreement against WCI to transfer
its interest in the LLC to Buyer.
2. The interest in the LLC shall be retained by WCI, and
WCI shall take all action necessary to obtain the consent of the
members of the LLC to the transfer of the interest in the LLC to
Buyer.
3. At such time as WCI shall have obtained the consent to
the transfer if the interest in the LLC, WCI shall transfer and
assign all of its right, title and interest in and to the
interest in the LLC to Buyer.
4. If WCI shall not have obtained the consent of the
members of the LLC to the transfer of WCI's interest on or before
December 31, 1995, then at any time thereafter upon written
demand by Buyer, WCI shall transfer all of its right, title and
interest in and to the LLC to Buyer.
5. Buyer agrees to cooperate and to take all action
reasonably requested by WCI, to obtain the consent to effect
the transfer.
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162
6. This Agreement and all questions relating to its
validity, interpretation, performance and enforcement shall be
governed by and construed in accordance with the laws of the
State of Missouri.
7. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of
which shall together constitute one and the same instrument.
This Agreement shall become binding when one (1) or more
counterparts, individually or take together, shall bear the
signatures of all of the parties reflected hereon as the
signatories.
8. 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 from the date of mailing, if
sent by registered or certified mail (postage prepaid, return
receipt requested) to the parties at the following addresses:
(a) If to Buyer or PhoneTel to:
000 Xxxxxxx Xxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Attn: Xxxxxx Xxxx
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3
163
(b) If to World or to WCI:
00000 Xxxxxxx Xxxx Xxxx
Xx. Xxxxx, XX 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Attn: Xxxxxx Xxxxxxxxx
with copy to:
Xxxxxxxxxx, Xxxxxx & Xxxxxxxxx, P.C.
000 Xxxxx Xxxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Attn: Xxxx X. Xxxxxxxx, 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
IN WITNESS WHEREOF, the undersigned have hereunto subscribed
their hands on the day and year first above written.
World:
WORLD COMMUNICATIONS, INC.
By:
Xxxx Xxxx, President
PhoneTel:
PHONETEL TECHNOLOGIES, INC.
By
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4
164
BUYER:
PHONETEL II, INC.
By:
WCI:
WCI II, INC.
By:
Xxxxxx Xxxxxxxxx, President
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