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STOCK PURCHASE AGREEMENT
AMONG APPLE COMMUNICATION, INC.,
XXXXXXXXX XXXXXXX, XXXX XXXXXXXX
AND
CONTACT COMMUNICATIONS INC.
October 6, 1995
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TABLE OF CONTENTS
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ARTICLE 1
PURCHASE AND SALE OF SHARES
1.1 Purchase and Sale. . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
2.1 Due Organization . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Due Authorization. . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 Purchaser Information. . . . . . . . . . . . . . . . . . . . . . 3
2.5 Regulatory Certificates. . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
APPLE AND THE SELLERS
3.1 Due Organization; Ownership; Subsidiaries. . . . . . . . . . . . 4
3.2 Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.3 Title to Shares. . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4 Due Authorization. . . . . . . . . . . . . . . . . . . . . . . . 4
3.5 Conflicts. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.6 Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.7 Financial Statements . . . . . . . . . . . . . . . . . . . . . . 5
3.8 Conduct of Business; Certain Actions . . . . . . . . . . . . . . 6
3.9 Properties.. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.10 Pagers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.11 Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . 8
3.12 Intellectual Rights. . . . . . . . . . . . . . . . . . . . . . . 8
3.13 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . 8
3.14 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.15 ERISA Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.16 Contracts and Agreements . . . . . . . . . . . . . . . . . . . . 9
3.17 Claims and Proceedings . . . . . . . . . . . . . . . . . . . . . 10
3.18 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.19 Personnel. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.20 Business Relations . . . . . . . . . . . . . . . . . . . . . . . 11
(i)
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3.21 Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.22 Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.23 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . 12
3.24 Customers and Suppliers. . . . . . . . . . . . . . . . . . . . . 12
3.25 Interest in Competitors, Suppliers, and Customers. . . . . . . . 12
3.26 Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.27 Commission Sales Contracts . . . . . . . . . . . . . . . . . . . 12
3.28 Regulatory Certificates. . . . . . . . . . . . . . . . . . . . . 12
3.29 Investment.. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.30 Sophisticated Investor Status. . . . . . . . . . . . . . . . . . 13
3.31 Investment Risk. . . . . . . . . . . . . . . . . . . . . . . . . 13
3.32 Legends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.33 Purchaser Information. . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 4
COVENANTS
4.1 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.2 Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.3 Satisfaction of All Conditions Precedent . . . . . . . . . . . . 14
4.4 No Solicitation. . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Notice of Developments . . . . . . . . . . . . . . . . . . . . . 15
4.6 Notice of Breach . . . . . . . . . . . . . . . . . . . . . . . . 15
4.7 Notice of Litigation . . . . . . . . . . . . . . . . . . . . . . 15
4.8 Continuation of Insurance Coverage . . . . . . . . . . . . . . . 16
4.9 Maintenance of Credit Terms. . . . . . . . . . . . . . . . . . . 16
4.10 Updating Information . . . . . . . . . . . . . . . . . . . . . . 16
4.11 Interim Operations of Apple. . . . . . . . . . . . . . . . . . . 16
4.12 Financial Statements . . . . . . . . . . . . . . . . . . . . . . 17
4.13 Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.14 Resignations of Directors and Officers . . . . . . . . . . . . . 17
4.15 Best Page Assets . . . . . . . . . . . . . . . . . . . . . . . . 17
4.16 Restrictive Legends. . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 5
REGULATORY APPROVALS
(ii)
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ARTICLE 6
CONDITIONS TO CLOSING
6.1 Conditions to Obligations of the Purchaser . . . . . . . . . . . 18
6.2 Conditions to Obligations of the Sellers . . . . . . . . . . . . 21
ARTICLE 7
TERMINATION
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification of the Purchaser . . . . . . . . . . . . . . . . 22
8.2 Indemnification of the Sellers . . . . . . . . . . . . . . . . . 23
8.3 Defense of Third-Party Claims. . . . . . . . . . . . . . . . . . 23
8.4 Direct Claims. . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.5 No Contribution. . . . . . . . . . . . . . . . . . . . . . . . . 25
8.6 Escrow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 9
MISCELLANEOUS
9.1 Collateral Agreements, Amendments, and Waivers . . . . . . . . . 25
9.2 Restriction on Transfer of ProNet Common Stock . . . . . . . . . 25
9.3 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 25
9.4 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.5 Surplus Working Capital. . . . . . . . . . . . . . . . . . . . . 26
9.6 Invalid Provisions . . . . . . . . . . . . . . . . . . . . . . . 26
9.7 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.9 Survival of Representations, Warranties, and Covenants . . . . . 27
9.10 Public Announcement. . . . . . . . . . . . . . . . . . . . . . . 27
9.11 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 27
9.12 No Third-Party Beneficiaries . . . . . . . . . . . . . . . . . . 28
9.13 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.14 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.15 Sections; Exhibits . . . . . . . . . . . . . . . . . . . . . . . 28
(iii)
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9.16 Number and Gender of Words . . . . . . . . . . . . . . . . . . . 28
9.17 Specific Performance . . . . . . . . . . . . . . . . . . . . . . 28
SCHEDULES
1.3 Allocation of the Purchase Price
3.1 Foreign Qualification
3.5 Conflicts
3.6 Consents
3.7(a) June Asset List
3.8 Conduct of Business
3.9 Properties
3.10 Tariffs
3.11 Licenses and Permits
3.12 Intellectual Rights
3.13 Insurance
3.16 Material Contracts
3.17 Claims and Proceedings
3.19 Personnel
3.22 Warranties
3.23 Accounts Receivable
3.24 Customers and Suppliers
3.25 Subsidiaries
3.26 Inventory
3.27 Commission Sales Contracts
EXHIBITS
A - Indemnification Escrow Agreement
B - Form of Opinion of Counsel to Apple and the Sellers
C - Form of Opinion of FCC Counsel to Apple
D - Noncompetition Agreement - Seller
E - Registration Rights Agreement
F - Form of Opinion of Xxxxxx & Xxxxxx L.L.P.
G - Form of Assignment of Xxxx of Sale
H - Form of Indemnification Agreement
(iv)
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered into
as of October 6, 1995, by and among Apple Communication, Inc., an Illinois
corporation ("Apple"), Xxxxxxxxx Xxxxxxx ("Xxxxxxx") and Xxxx XxXxxxxx
("XxXxxxxx" and, together with Xxxxxxx, the "Sellers"), and Contact
Communications Inc., a Delaware corporation (the "Purchaser").
R E C I T A L S
A. The Sellers collectively own four shares (the "Shares") of the Common
Stock, no par value ("Apple Common Stock"), of Apple, which Shares constitute
all of the authorized, issued, and outstanding capital stock of Apple.
B. The Purchaser desires to purchase from the Sellers, and the Sellers
desire to sell to the Purchaser, the Shares in consideration of the Purchase
Price (hereinafter defined), upon the terms and subject to the conditions set
forth herein.
A G R E E M E N T S
NOW, THEREFORE, in consideration of the respective representations,
warranties, agreements, and conditions hereinafter set forth, and other good
and valuable consideration, the sufficiency of which is hereby acknowledged,
the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES
1.1 PURCHASE AND SALE. On the Closing Date (as hereinafter defined), the
Sellers shall sell to the Purchaser, and the Purchaser shall purchase from the
Sellers, on the terms and conditions set forth in this Agreement, the Shares,
free and clear of all liens, security interests, claims, rights of another, and
encumbrances of any kind or character.
1.2 PURCHASE PRICE. The aggregate purchase price payable by the Purchaser
to the Sellers in consideration for the sale of the Shares shall be an amount
equal to the sum of (a) $404,000, which amount shall be deposited with the
Escrow Agent (hereinafter defined) by the Purchaser in accordance with the terms
of an Indemnification Escrow Agreement (herein so called), by and among the
Sellers, the Purchaser, Best Page, Inc., an Illinois corporation ("Best Page"),
and the Escrow Agent, substantially in the form attached hereto as EXHIBIT A,
(b) $4,096,000 payable in cash on the Closing Date, and (c) $4,500,000 payable
on the Closing Date in shares of common stock, par value $.01 per share ("ProNet
Common Stock"), of ProNet Inc., a Delaware corporation and the parent
corporation of the Purchaser ("ProNet"), if the ProNet Common Stock is then
registered pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and quoted on the National Association of
Securities Dealers Automated Quotation System (or other quotation system or
securities exchange), valued at the Average Closing Price (hereinafter defined)
as of the Closing Date, and payable in cash if the ProNet Common Stock is not
then so
registered. The timing of any Dispositions (hereinafter defined) of
such shares of ProNet Common Stock by the Sellers will be subject to certain
restrictions as provided in Section 9.2. As used herein, "Average Closing
Price" means the average closing price of the ProNet Common Stock on the
National Market System of the National Association of Securities Dealers
Automated Quotation System (or such other quotation system or securities
exchange on which the Common Stock is then quoted or listed) as reported by the
Wall Street Journal for the 20 consecutive trading days beginning 25 trading
days prior to the Closing Date.
If the Purchaser fails to file a "shelf" registration statement or
amendment to an existing "shelf" registration statement registering the resale
by the Sellers of the shares of ProNet Common Stock delivered to them hereunder
within 14 days after the Closing in accordance with the provisions of the
Registration Rights Agreement attached hereto as EXHIBIT E or, after such
filing, the Securities and Exchange Commission has not declared such
registration statement effective within 45 days after the Closing, the Sellers
shall have the option, in their sole discretion, to require the Purchaser to
repurchase all of the ProNet Common Stock delivered to the Sellers pursuant
hereto for $4,500,000 in cash. If the Sellers elect to require such repurchase,
then (a) such repurchase shall be closed on the 25th business day following the
Closing at the Purchaser's address as set forth in Section 9.8 hereof, (b) at
such closing, (i) the Purchaser shall deliver to each Seller by certified bank
check or wire transfer the portion of the $4,500,000 to be paid to such Seller
and (ii) the Sellers shall deliver to the Purchaser the certificates
representing all such shares of ProNet Common Stock, accompanied by stock powers
duly executed by the Sellers in blank, and (c) such shares shall be delivered to
the Purchaser free and clear of all liens, security interests, claims, rights of
another, and encumbrances of any kind or character (and each Seller shall
certify to such effect at such closing).
1.3 CLOSING.
(a) CLOSING DATE. The closing of the transactions contemplated
hereby (the "Closing") shall take place at the offices of Xxxxxx & Xxxxxx
L.L.P., 0000 Xxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000 at 9:00 a.m., local
time, on the last day of the month in which all Federal, state, and local
regulatory approvals for the transactions contemplated hereby are received by
Final Order (as hereinafter defined) or at such other time as may be agreed upon
by the parties hereto.
(b) DELIVERY AND PAYMENT. At the Closing, (i) each Seller shall
deliver to the Purchaser stock certificates evidencing all of the Shares owned
by such Seller duly endorsed or accompanied by a duly executed stock power
assigning such Shares to the Purchaser and otherwise in good form for transfer
and (ii) the Purchaser shall deliver to (A) each Seller (1) a certified bank
check or wire transfer for the amount of the cash portion of the Purchase Price
to be paid to such Seller on the Closing Date as provided in SCHEDULE 1.3,
(2) certificates evidencing the shares of ProNet Common Stock payable to such
Seller as provided in SCHEDULE 1.3, and (3) a certified bank check or wire
transfer in the amount of the consideration to be paid to such Seller as
provided in the
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Noncompetition Agreements, and (B) the Escrow Agent the sum of $404,000
pursuant to the terms of the Indemnification Escrow Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants Apple and to the Sellers as
follows (with the understanding that Apple and the Sellers are relying
materially on each such representation and warranty in entering into and
performing this Agreement):
2.1 DUE ORGANIZATION. The Purchaser and ProNet are each corporations duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and have full corporate power and corporate authority to own or lease
their respective properties and to carry on their respective businesses as, and
in the places where, such properties are owned or leased and such business is
conducted. The Purchaser is a wholly owned subsidiary of ProNet.
2.2 DUE AUTHORIZATION. The Purchaser and ProNet each have full corporate
power and corporate authority to enter into and perform their respective
obligations under this Agreement, and each agreement, document, and instrument
required to be executed by either of them in accordance herewith. This
Agreement and any other agreements, documents, and instruments required to be
executed and delivered by the Purchaser or ProNet in accordance herewith have
been, or by the Closing shall have been, duly and validly executed and delivered
by the Purchaser or ProNet, as applicable, and shall, upon their execution,
constitute valid and binding obligations of the Purchaser or ProNet, as
applicable, enforceable in accordance with their respective terms.
2.3 COMMON STOCK. The ProNet Common Stock to be issued by ProNet to the
Sellers in payment of a portion of the Purchase Price, when issued and delivered
in accordance with the terms of this Agreement, will be duly authorized, validly
issued, fully paid, and non-assessable and will be delivered to the Sellers free
and clear of all liens, security interests, pledges, and other encumbrances.
2.4 PURCHASER INFORMATION. The Purchaser has delivered to the Sellers
true and correct copies of the ProNet's most recent Proxy Statement, Annual
Report on Form 10-K, Quarterly Report on Form 10-Q and certain current reports
on Form 8-K (collectively, the "ProNet Filings") and, as of the date hereof,
none of such documents taken as a whole contain any untrue statement of a
material fact or omits any material fact necessary to make the statements
therein not misleading.
2.5 REGULATORY CERTIFICATES. Neither the Purchaser nor ProNet is aware of
any information concerning the Purchaser or ProNet or either of their operations
that could cause the FCC or any other regulatory authority not to issue to the
Purchaser all regulatory certificates and approvals necessary for the
consummation of the transactions contemplated hereunder and for the operation of
the System subsequent thereto.
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF
APPLE AND THE SELLERS
Apple and each of the Sellers hereby jointly and severally represent and
warrant to the Purchaser as follows (with the understanding that the Purchaser
is relying materially on each such representation and warranty in entering into
and performing this Agreement):
3.1 DUE ORGANIZATION; OWNERSHIP; SUBSIDIARIES. Apple is a corporation
duly organized, validly existing, and in good standing under the laws of the
State of Illinois and has full corporate power and corporate authority to own or
lease its properties and to carry on its businesses as, and in the places where,
such properties are owned or leased and such businesses are conducted. Apple is
qualified to do business and is in good standing in the states set forth on
SCHEDULE 3.1 attached hereto, which states represent every jurisdiction where
such qualification is required. No other jurisdiction has asserted a claim that
Apple is required to qualify to do business as a foreign corporation in such
jurisdiction. Apple does not have any subsidiaries, or any equity investment in
any other corporation, partnership, joint venture, or other business enterprise.
3.2 CAPITAL STOCK. The authorized capital stock of Apple consists solely
of 100 shares of Apple Common Stock, four of which 100 shares are issued and
outstanding. All of the Shares are duly authorized and validly issued, fully
paid, and nonassessable. None of the Shares was issued in violation of any
preemptive or preferential right. There are no other equity securities of Apple
outstanding. There are outstanding no securities or indebtedness convertible
into, exchangeable for, or carrying the right to acquire, Apple Common Stock or
other equity securities of Apple, or subscriptions, warrants, options, rights,
or other arrangements or commitments obligating Apple to issue or dispose of any
Apple Common Stock or other equity securities or any ownership therein.
3.3 TITLE TO SHARES. Xxxxxxx is the true and lawful owner, of record and
beneficially, of three of the Shares and XxXxxxxx is the true and lawful owner,
of record and beneficially, of one of the Shares. The Shares are, and on the
Closing Date will be, owned by the Sellers free and clear of all liens, security
interests, pledges, assessments, charges, adverse claims, leases, licenses,
restrictions, or other encumbrances (collectively, "Liens"). Other than the
rights and obligations arising under this Agreement and that certain Buy-Sell
Agreement among the Sellers and Apple, none of the Shares is subject to any
rights of any other person to acquire the same. None of the Shares is subject
to any Liens or restrictions on transfer thereof, except for restrictions
imposed by applicable federal and state securities laws.
3.4 DUE AUTHORIZATION. Apple has full corporate power and corporate
authority to enter into and perform its obligations under this Agreement and
each agreement, document, and instrument required to be executed by Apple in
accordance herewith. The execution, delivery, and performance of this Agreement
and any agreements, documents,
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and instruments required to be executed by Apple have been duly authorized by
the Board of Directors of Apple. This Agreement and the agreements,
documents, and instruments required to be executed and delivered by Apple or
either of the Sellers in accordance herewith have been duly and validly
executed and delivered by Apple or the Sellers and constitute valid and
binding obligations of Apple and/or the Sellers enforceable in accordance
with their respective terms, except that (a) such enforcement may be subject
to applicable bankruptcy, insolvency, fraudulent transfer, or other laws, now
or hereafter in effect, affecting creditors' rights generally, and (b) the
remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses (including commercial
reasonableness, good faith, and fair dealing) and to the discretion of the
court before which any proceeding therefor may be brought.
3.5 CONFLICTS. Except as set forth on SCHEDULE 3.5, neither the
execution, delivery, nor performance of this Agreement or any other agreement,
document, or instrument to be executed by Apple and/or either of the Sellers in
connection herewith shall (a) violate any Federal, state, county, or local law,
rule, or regulation applicable to Apple or any of the Sellers, or its or his
properties, (b) violate or conflict with, or permit the cancellation of, any
agreement to which Apple or either Seller is a party, or by which it, he, or she
or any of its, his, or her properties are bound, or result in the creation of
any lien, security interest, charge, or encumbrance upon any of such properties,
(c) result in the acceleration of the maturity of any indebtedness of, or
indebtedness secured by any property or other assets of, Apple, or (d) violate
or conflict with any provision of the certificate of incorporation or by-laws of
Apple.
3.6 CONSENTS. Set forth on SCHEDULE 3.6 attached hereto is a complete
list of all actions, consents, or approvals of, or filings with, any
governmental authorities or third parties required in connection with the
execution, delivery, or performance of this Agreement or any agreement,
document, or other instrument to be executed in connection herewith by either of
the Sellers or Apple.
3.7 FINANCIAL STATEMENTS. Apple has delivered to the Purchaser (a) a
complete and correct copy of the audited statement of financial condition of
Apple as of December 31, 1994 and the related statements of operations and
retained earnings for the period then ended (the "Audited Financial
Statements"), (b) a complete and correct copy of the statement of financial
condition of Apple as of June 30, 1995, and the related statements of
operations and retained earnings for the period then ended, each of which
have been prepared by Ernst & Young (the "Interim Financial Statements" and,
together with the Audited Financial Statements, the "Financial Statements"),
and (c) a complete and correct list of the tangible assets of Apple (the
"Tangible Assets") together with the book value of each such Tangible Asset
as of June 30, 1995, which list is set forth on SCHEDULE 3.7(a) attached
hereto (the "June Asset List"). The Financial Statements have been prepared
in accordance with generally accepted accounting principles applied on a
consistent basis throughout the periods indicated (except, with respect to
the Interim Financial Statements, for the absence of footnotes, and subject
to normal year-end adjustments and accruals required to be made in the
ordinary course of business consistent with past practices) and fairly
present the financial position, results of operations, and
5
changes in financial position of Apple as of the indicated dates and for the
indicated periods. The June Asset List has been prepared in accordance with
and is otherwise consistent with the books and records of Apple, presents
fairly and accurately the book value of each of the Tangible Assets. Since
June 30, 1995, there has been no material adverse change in the financial
position, assets, results of operations, business, or prospects of the
System. To the best knowledge of Apple and the Sellers, there are no pending
or proposed statutes, rules, or regulations, nor any current or pending
developments or circumstances, which would have a material adverse effect on
the business, properties, assets, or prospects of the System.
3.8 CONDUCT OF BUSINESS; CERTAIN ACTIONS. Except as set forth on SCHEDULE
3.8 attached hereto, since June 30, 1995, Apple has conducted its business and
operations in the ordinary course and consistent with its past practices and has
not (a) increased the compensation of any of its directors, officers, or key
employees or, except for wage and salary increases made in the ordinary course
of business and consistent with the past practices of Apple, increased the
compensation of any other Apple employees, (b) made any capital expenditures
exceeding $5,000 individually or $15,000 in the aggregate (other than purchases
of pagers for inventory in the ordinary course of business and capital
expenditures in connection with the construction of transmitting sites in the
ordinary course of business), (c) sold any asset (or any group of related
assets) in any transaction (or series of related transactions) in which the
purchase price for such asset (or group of related assets) exceeded $3,000,
(d) discharged or satisfied any lien or encumbrance or paid any obligation or
liability, absolute or contingent, other than current liabilities incurred and
paid in the ordinary course of business, (e) made or guaranteed any loans or
advances to any party whatsoever, (f) suffered or permitted any lien, security
interest, claim, charge, or other encumbrance to arise or be granted or created
against or upon any of its assets, (g) cancelled, waived, or released any debts,
rights, or claims against third parties, (h) made any change in the method of
accounting of Apple, (i) made any investment or commitment therefor in any
person, business, corporation, limited liability company, association,
partnership, joint venture, trust, or other entity, (j) made, entered into,
amended, or terminated any written employment contract or created, made,
amended, or terminated any bonus, stock option, pension, retirement, profit
sharing, or other employee benefit plan or arrangement, or withdrawn from any
"multi-employer plan" (as defined in Section 414(f) of the Internal Revenue Code
of 1986, as amended (the "Code")) so as to create any liability under Article IV
of ERISA (as hereinafter defined) to any entity, (k) amended, renewed, or
experienced a termination of any contract, agreement, lease, franchise, or
license to which Apple is a party, except in the ordinary course of business,
(l) entered into any other material transactions except in the ordinary course
of business, (m) entered into any contract, commitment, agreement, or
understanding to do any acts described in the foregoing clauses (a)-(l) of this
Section 3.8, (n) suffered any material damage, destruction, or loss (whether or
not covered by insurance) to any of the its assets, (o) experienced any strike,
slowdown, or demand for recognition by a labor organization by or with respect
to any of its employees, or (p) experienced or effected any shutdown, slow-down,
or cessation of its operations.
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3.9 PROPERTIES.
(a) REAL PROPERTY. SCHEDULE 3.9 hereto lists all real property owned
by Apple (the "Real Property"). Apple does not own any interest in any other
real property. Apple has good title to the Real Property free and clear of any
Liens, except for (i) statutory liens for current Taxes (hereinafter defined)
not yet due and payable, (ii) agreements with, and/or conditions imposed on the
issuance of land use permits, zoning, business licenses, use permits or other
entitlements of various types issued by city, county, state, and Federal
governmental bodies or agencies necessary or beneficial to the continued use and
occupancy of Apple's assets or the continuation of Apple's operations, and
(iii) mechanics', carriers', workers', repairers', and other similar liens
imposed by law arising or incurred in the ordinary course of business for
obligations not yet due and payable. All of such properties are in good
operating condition and repair, subject to ordinary wear and tear. Apple and
the Sellers have delivered to the Purchaser true and complete copies of all
surveys, appraisals, and title insurance policies relating to the Real Property
in its or their possession.
(b) PERSONAL PROPERTY. Except for inventory and supplies disposed of
or consumed in the ordinary course of business, consistent with past practice,
Apple owns all of its inventory, equipment, and other personal property (both
tangible and intangible) reflected on the latest balance sheet included in the
Financial Statements, and any notes and schedules thereto, free and clear of any
Liens, except for statutory liens for current Taxes not yet due and payable.
(c) LEASEHOLDS. SCHEDULE 3.9 hereto lists all leases of real
property, all leases of vehicles and rolling stock and all other leases of
personal property with annual lease payments over $5,000, to which Apple is a
party or to which any of the assets of Apple is subject. Apple owns the
leasehold estates created by all such leases free and clear of any Liens, except
for (i) statutory liens for current Taxes not yet due and payable, (ii) in the
case of leases of real property, agreements with, and/or conditions imposed on
the issuance of land use permits, zoning, business licenses, use permits or
other entitlements of various types issued by city, county, state, and federal
governmental bodies or agencies, necessary or beneficial to the continued use
and occupancy of Apple's assets or the continuation of Apple's operations,
(iii) mechanics', carriers', workers', repairers', and other similar liens
imposed by law arising or incurred in the ordinary course of business for
obligations not yet due, and (iv) in the case of leases of vehicles, rolling
stock, and other personal property, encumbrances, which do not, individually or
in the aggregate, materially impair the operation of the business at the
facility at which such leased equipment or other personal property is located.
3.10 PAGERS. SCHEDULE 3.10 includes a true and complete list of the number
and type of pagers in service in Apple's radio paging system (the "System") as
of August 31, 1995. All of such pagers in service are operating pursuant to
valid and binding rental and/or service agreements with Apple or agents or
resellers, no single subscriber or related group of subscribers accounts for
more than five percent of the paging revenues attributable to the System, and
Apple and the Sellers do not know of any current subscribers who intend to
7
discontinue the use of such service for any reason including, but not limited
to, the consummation of the transactions contemplated herein. As used herein,
"rental" means, with respect to any pager, provision of communications private
carriage pursuant to Part 90 of the Communications Act of 1934, as amended, and
the rental or lease of subscriber equipment to the customer by Apple or its
agents or resellers to permit the customer to utilize such service. The rates
charged to subscribers for each class of service and copies of all applicable
tariffs filed with governmental agencies regulating the rates to be charged to
subscribers of the System are all contained in SCHEDULE 3.10.
3.11 LICENSES AND PERMITS. Set forth on SCHEDULE 3.11 is a list of all
federal, state, county, and local governmental licenses, authorizations,
certificates, permits, and orders (collectively, the "Licenses") held or applied
for by Apple. Except as set forth on SCHEDULE 3.11, Apple has complied and is
in compliance with the terms and conditions of all Licenses, and no violation of
any such Licenses or the laws or rules governing the issuance or continued
validity thereof, has occurred. Other than the consents required to be obtained
in connection with this Agreement (which consents are set forth on SCHEDULE 3.6
hereto), no additional license, authorization, certificate, permit, or order is
required from any Federal, state, county, or local governmental agency or body
thereof in connection with the operation of the System by Apple or the Purchaser
or the ownership by Apple or the Purchaser or the transfer of the Transferred
Assets by Apple to the Purchaser. No claim has been made by any governmental
authority to the effect that any license, authorization, certificate, permit, or
order in addition to those listed on SCHEDULE 3.11 is necessary for the conduct
of Apple's business.
3.12 INTELLECTUAL RIGHTS. Attached hereto as SCHEDULE 3.12 is a list and
description of all patents, trademarks, servicemarks, tradenames, and copyrights
and applications therefor owned by or registered in the name of Apple or in
which Apple has any right, license, or interest. Apple has good and marketable
title to or the right to use such patents, trademarks, service marks,
tradenames, and copyrights and all inventions, processes, designs, formulae,
trade secrets, and know-how necessary for the conduct of its business, without
the payment of any royalty or similar payment. Apple is not a party to any
license agreements whether written or oral, either as licensor or licensee, with
respect to any patents, trademarks, servicemarks, tradenames, or copyrights or
applications therefor. To the best knowledge of Apple and each of the Sellers,
Apple is not infringing any patent, trademark, servicemark, tradename, or
copyright of others, and neither Apple nor the Sellers are aware of any
infringement by others of any such rights owned by Apple.
3.13 COMPLIANCE WITH LAWS. Apple has complied in all material respects,
and is in compliance in all material respects, with all federal, state, county,
and local laws, regulations, and orders that are applicable to Apple's business
including, but not limited to, the rules and regulations of the Federal
Communications Commission (the "FCC") and the Federal Aviation Administration
(the "FAA") and the states and municipalities in which the System is located,
and has filed with the proper authorities all statements and reports required by
the laws, regulations, and orders to which Apple or its properties or operations
are subject. Apple and the Sellers represent and warrant that they have
complied in all material respects and, prior to the Closing, will comply in all
material respects with, all
8
rules, regulations, policies, precedents, and orders of the FCC and the FAA
applicable to them with respect to marking, lighting, notification, and
approval of each and every tower used in Apple's business. To the knowledge
of Apple and the Sellers, none of the owners of any of the towers on which
Apple leases tower space has failed to comply in any material respect with
any of the aforesaid rules, regulations, policies, precedents, and orders of
the FCC or the FAA applicable to such owner in its capacity as a tower owner.
No claim has been made by any governmental authority (and, to the best
knowledge of Apple and the Sellers, no such claim is anticipated) to the
effect that the business conducted by Apple fails to comply, in any material
respect, with any law, rule, regulation, or ordinance. As used in this
Section 3.13, "complied in all material respects" means that no action has
been taken and no failure to act has occurred that individually or in the
aggregate could reasonably be expected to result in the suspension or
revocation of any License. Without limiting the foregoing, Apple has
complied with all judicial and governmental requirements relating to
pollution and environmental control and regulation and employee health and
safety including, but not limited to, laws, rules, regulations, ordinances,
and orders related to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, handling, presence, emission,
discharge, release, or threatened release into or on the air, land, surface,
water, groundwater, personal property, or structures, wherever located, of
any contaminants, hazardous materials, hazardous or toxic substances, or
wastes as defined under any federal, state, or local laws, regulations, or
ordinances.
3.14 INSURANCE. Attached hereto as SCHEDULE 3.14 is a list of all policies
of fire, liability, business interruption, and other forms of insurance and all
fidelity bonds held by or applicable to Apple at any time since December 31,
1993, which schedule sets forth in respect of each such policy the policy name,
policy number, carrier, term, type of coverage, deductible amount or
self-insured retention amount, limits of coverage, and annual premium. No event
relating to Apple has occurred which is likely to result in any prospective
upward adjustment in such premiums. Excluding insurance policies which have
expired and been replaced, no insurance policy of Apple has been cancelled
within the last three years, and no threat has been made to cancel any insurance
policy of Apple within such period.
3.15 ERISA PLANS. Apple has no employee benefit plans subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
3.16 CONTRACTS AND AGREEMENTS. The contracts and agreements listed and
described in SCHEDULE 3.16 constitute all of the written or oral contracts,
commitments, leases, and other agreements (including, without limitation,
promissory notes, loan agreements, and other evidences of indebtedness but
excluding rental agreements and agreements with resellers) to which Apple is a
party or by which Apple or its properties are bound with respect to which the
obligations of or the benefits to be received by Apple could reasonably be
expected to have a value in excess of $5,000 in any consecutive 12 month period
(each a "Material Agreement"). Apple has also furnished to the Purchaser
Apple's standard form rental agreement and agreement with resellers used in the
ordinary course of Apple's business. Apple is not a lessor under any rental
agreement or reseller agreement that varies from such standard form agreement in
any material respect. Apple and the
9
Sellers have afforded to the Purchaser and the Purchaser's officers,
attorneys, and other representatives the opportunity to review complete and
correct copies of all of the Material Agreements. Apple is not and, to the
best knowledge of Apple and the Sellers, no other party thereto is in default
(and no event has occurred which, with the passage of time or the giving of
notice, or both, would constitute a default) under any Material Agreements,
and Apple has not waived any right under any Material Agreements. Neither
Apple nor either Sellers has received any notice of default or termination
under any Material Agreements and Apple has not assigned or otherwise
transferred any rights under any Material Agreements. None of the Material
Agreements are leases in connection with which an election was made under
Section 168(f)(8) of the Code.
3.17 CLAIMS AND PROCEEDINGS. Attached hereto as SCHEDULE 3.17 is a list
and description of all claims, actions, suits, proceedings, and investigations
pending or, to the best knowledge of Apple and the Sellers, threatened against
or affecting Apple or any of its properties or assets, at law or in equity, or
before or by any court, municipal or other governmental department, commission,
board, agency, or instrumentality. Except as set forth on SCHEDULE 3.17
attached hereto, none of such claims, actions, suits, proceedings, or
investigations will result in any liability or loss to Apple which (individually
or in the aggregate) is material to Apple, and Apple has not been, and Apple is
not now, subject to any order, judgment, decree, stipulation, or consent of any
court, governmental body, or agency. No inquiry, action, or proceeding has been
asserted, instituted, or, to the best knowledge of Apple and the Sellers,
threatened to restrain or prohibit the carrying out of the transactions
contemplated by this Agreement or to challenge the validity of such transactions
or any part thereof or seeking damages on account thereof. To the best
knowledge of Apple and the Sellers, there is no basis for any such claim or
action or any other claims or actions which would, or could reasonably be
expected to (individually or in the aggregate), have a material adverse effect
on the business, operations, or financial condition or prospects of Apple or the
System or result in a material liability of Apple.
3.18 TAXES. All Federal, foreign, state, county, and local income, gross
receipts, excise, property, ad valorem, transfer, franchise, capital stock,
business and occupation, license, sales, use, value-added, transfer, profits,
gains, mortgage recording, disability, employment, payroll, withholding, custom,
estimated, and other taxes, fees and assessments imposed by any governmental
entity, agency, or instrumentality (individually, a "Tax" and collectively,
"Taxes") returns, reports, statements, invoices, and declarations of estimated
tax (collectively, "Returns") which were required to be filed by Apple on or
before the date hereof have been filed within the time and in the manner
provided by law, and all such Returns are true, correct, and complete and
accurately reflect the liabilities for Tax of Apple. All Taxes, penalties,
interest, and other additions to Taxes which have become due pursuant to such
Returns have been adequately accrued in the Financial Statements of Apple and,
to the extent the due date for payment of such Taxes has occurred prior to the
Closing date hereof, have been timely paid by Apple. All annual or other FCC
regulatory fees arising from the operations of Apple have been paid. Apple has
not executed any presently effective waiver or extension of any statute of
limitations against assessments and collections of Taxes, interest, penalties,
or additions to Taxes or any extension of time to file any Return. There are no
pending or threatened claims, assessments, notices, proposals
10
to assess, deficiencies, or audits (collectively, "Apple Tax Actions") with
respect to any Taxes, penalties, interest, or additions to Taxes owed or
allegedly owed by Apple. To the best knowledge of Apple and the Sellers,
there is no basis for any Apple Tax Actions. There are no liens for Taxes
(other than any Liens for Taxes that are not yet due), penalties, interest,
or additions to Taxes on any of the assets of Apple. Proper and accurate
amounts of any and all payroll and employment Taxes that are required to be
withheld have been withheld and remitted by Apple from and in respect of its
directors, officers, shareholders, and employees for all periods in full and
complete compliance with the tax withholding provisions of all applicable
laws and regulations.
3.19 PERSONNEL. Attached hereto as SCHEDULE 3.19 is a list of the names
and annual rates of compensation of the employees of the System whose annual
rates of compensation during the fiscal year ending December 31, 1994 (including
base salary, bonuses, commissions, and incentive pay), exceeded or are expected
to exceed $30,000. SCHEDULE 3.19 also summarizes the bonus, profit sharing,
percentage compensation, company automobile, club membership, and other like
benefits, if any, paid or payable to such employees during such fiscal year and
to the date hereof. SCHEDULE 3.19 also contains a brief description of all
material terms of all employment agreements and confidentiality agreements to
which Apple is a party and all severance benefits which any director, officer,
or employee of Apple is or may be entitled to receive. Apple has delivered to
the Purchaser accurate and complete copies of all such employment agreements,
confidentiality agreements, and all other agreements, plans, and other
instruments to which Apple is a party and under which any of its employees are
entitled to receive benefits of any nature. The employee relations of Apple
have historically been good and there is no pending or, to the best knowledge of
Apple and the Sellers, threatened labor dispute or union organization campaign
involving Apple. None of the employees of Apple is represented by any labor
union or organization. Apple is in compliance with all federal and state laws
respecting employment and employment practices, terms and conditions of
employment, and wages and hours and is not engaged in any unfair labor
practices. There is no unfair labor practice claim against Apple before the
National Labor Relations Board or any strike, labor dispute, work slowdown, or
work stoppage pending or, to the best knowledge of Apple and the Sellers,
threatened against or involving Apple.
3.20 BUSINESS RELATIONS. Neither Apple nor either Seller knows or has any
reason to believe that any customer or supplier of the System will cease or
otherwise refuse to do business after the Closing in the same manner as such
business was previously conducted with Apple. Apple has not received any notice
of any disruption (including delayed deliveries or allocations by suppliers) in
the availability of the materials or products used by Apple nor are Apple or the
Sellers aware of any facts which could lead any of them to believe that the
operations of Apple will be subject to any such material disruption.
3.21 BROKERS. Other than an agreement with Communications Equity
Associates, Inc., which obligation is and shall remain the sole obligation of
the Sellers, neither Apple nor either Seller has caused any liability to be
incurred to any finder, broker, or sales agent in connection with the execution,
delivery, or performance of this Agreement or the transactions contemplated
hereby.
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3.22 WARRANTIES. Attached hereto as SCHEDULE 3.22 is a list and brief
description of all warranties and guarantees made by Apple to third parties with
respect to any products sold or leased or services rendered by Apple. Except as
set forth on SCHEDULE 3.22, no claims for breach of product or service
warranties to customers have been made against Apple since January 1, 1992. To
the best knowledge of Apple and the Sellers, no state of facts exists, or event
has occurred, which may form the basis of any claim against Apple for liability
on account of any express or implied warranty to any third party.
3.23 ACCOUNTS RECEIVABLE. Except as set forth on SCHEDULE 3.23, all of the
accounts, notes, and loans receivable that have been recorded on the books of
Apple are bona fide and represent amounts validly due and, assuming collection
efforts consistent with past practices, all such accounts receivable (net of
reserves set forth on Apple's balance sheet as of June 30, 1995) should be
collectable within 120 days after the Closing Date consistent with Apple's
historical collection results. All of such accounts, notes, and loans
receivable are free and clear of any security interests, liens, encumbrances, or
other charges; none of such accounts, notes, or loans receivable are subject to
any offsets or claims of offset; and none of the obligors of such accounts,
notes, or loans receivable have given notice that they will or may refuse to pay
the full amount thereof or any portion thereof.
3.24 CUSTOMERS AND SUPPLIERS. SCHEDULE 3.24 contains a true, correct, and
complete list of (a) Apple's ten largest customers (measured in dollar volume of
revenue) during the year ended December 31, 1994, (b) Apple's ten largest
suppliers (measured in dollar volume of purchases) during the year ended
December 31, 1994, and (c) with respect to each such customer and supplier, the
name and address thereof, dollar volume involved, and nature of the relationship
(including the principal categories of products bought, sold, and leased).
3.25 INTEREST IN COMPETITORS, SUPPLIERS, AND CUSTOMERS. Except as set
forth in SCHEDULE 3.25, none of Apple, the Sellers, nor any officer or director
of Apple, or affiliate of any of the foregoing, has any ownership interest in
any competitor, supplier, or customer of the System or any property used in the
operation of the System.
3.26 INVENTORY. Except as set forth on SCHEDULE 3.26, the inventories
shown on the Financial Statements and the June Asset List consist of (and the
inventories of Apple at the Closing will consist of) items of a quality usable
and readily saleable in the ordinary course of business by Apple.
3.27 COMMISSION SALES CONTRACTS. Except as disclosed in SCHEDULE 3.27,
Apple does not employ or have any relationship with any individual, corporation,
partnership, or other entity whose compensation from Apple arising from the
operation of the System is in whole or in part determined on a commission basis.
3.28 REGULATORY CERTIFICATES. Neither Apple nor either Seller is aware of
any information concerning Apple or its operations that could cause the FCC or
any other regulatory authority not to issue to the Purchaser all regulatory
certificates and approvals
12
necessary for the consummation of the transactions contemplated hereunder and
for the operation of the System subsequent thereto.
3.29 INVESTMENT. Each Seller is acquiring the ProNet Common Stock from the
Purchaser pursuant hereto for its own account and not with a view to, or for
offer or resale in connection with any distribution thereof (within the meaning
of Section 2(11) of the Securities Act), nor with any present intention of
distributing or selling the same; and, other than pursuant to the provisions of
the Registration Rights Agreement attached as EXHIBIT E hereto, Apple has no
present or contemplated agreement, undertaking, arrangement, obligation,
indebtedness, or commitment providing for the disposition thereof.
Notwithstanding the foregoing, subject to the restrictions contained in
Section 9.2 and applicable law, the shares of ProNet Common Stock to be received
by the Sellers hereunder shall be freely transferable.
3.30 SOPHISTICATED INVESTOR STATUS. The Sellers are each Accredited
Investors, as such term is defined in Rule 501 promulgated under the Securities
Act of 1933, as amended (the "Securities Act").
3.31 INVESTMENT RISK. Each Seller acknowledges and agrees that the
acquisition by such Seller of ProNet Common Stock from the Purchaser pursuant to
this Agreement carries a certain degree of risk and that he or she has taken
full cognizance of and understands all of the risks related to the acquisition
of ProNet Common Stock.
3.32 LEGENDS. Each Seller understands, acknowledges, and agrees that a
legend will be placed on all certificates evidencing the ProNet Common Stock in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR THE STATE
SECURITIES LAWS OF ANY STATE. WITHOUT SUCH REGISTRATION,
SUCH SECURITIES MAY NOT BE SOLD, PLEDGED, HYPOTHECATED, OR
OTHERWISE TRANSFERRED AT ANY TIME WHATSOEVER, EXCEPT UPON
DELIVERY TO PRONET INC., A DELAWARE CORPORATION (THE
"COMPANY"), OF AN OPINION OF COUNSEL SATISFACTORY TO THE
COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER
AND/OR THE SUBMISSION TO THE COMPANY OF SUCH OTHER EVIDENCE
AS MAY BE SATISFACTORY TO THE COMPANY THAT ANY SUCH TRANSFER
WILL NOT BE IN VIOLATION OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND/OR APPLICABLE STATE SECURITIES LAWS, AND/OR ANY
13
RULE OR REGULATION PROMULGATED THEREUNDER.
3.33 PURCHASER INFORMATION. Each Seller has received from the Purchaser
copies of the ProNet Filings. Each Seller has carefully read or reviewed and is
familiar with the ProNet Filings. Each Seller and such Seller's representatives
all have had an opportunity to ask questions of persons acting on behalf of the
Purchaser and ProNet regarding ProNet and the ProNet Common Stock, and answers
have been provided to all such questions to such Seller's satisfaction.
3.34 INFORMATION FURNISHED. Apple and the Sellers have made available to
the Purchaser and its officers, attorneys, accountants, lenders, and
representatives true and correct copies of all agreements, documents, and other
items listed on the schedules to this Agreement and all books and records of
Apple, and neither this Agreement, the schedules hereto, nor any information,
agreements, or documents delivered to or made available to the Purchaser or its
officers, attorneys, accountants, lenders, and representatives pursuant to this
Agreement or otherwise contain any untrue statement of a material fact or omit
any material fact necessary to make the statements herein or therein, as the
case may be, not misleading.
ARTICLE 4
COVENANTS
4.1 INSPECTION. From the date hereof to the Closing, Apple and the
Sellers shall, upon reasonable notice, provide the Purchaser and the Purchaser's
officers, attorneys, accountants, representatives, and lenders free, full, and
complete access during business hours to all books, records, tax returns, files,
correspondence, personnel, facilities, and properties of Apple; provide the
Purchaser and its officers, attorneys, accountants, representatives, and lenders
all information and material pertaining to the business and affairs of Apple as
the Purchaser may deem necessary or appropriate; and use their best efforts to
afford the Purchaser and its officers, attorneys, accountants, and
representatives the opportunity to meet with the customers and suppliers of
Apple to discuss the business, condition (financial or otherwise), operations,
and prospects of Apple. Any investigation by the Purchaser or its officers,
attorneys, accountants, representatives, or lenders shall not in any manner
affect the representations and warranties of Apple and the Sellers contained
herein.
4.2 COMPLIANCE. From the date hereof to the Closing, neither Apple nor
the Sellers shall take or fail to take any action which action or failure to
take such action shall cause the representations and warranties made by Apple or
the Sellers herein to be untrue or incorrect as of the Closing.
4.3 SATISFACTION OF ALL CONDITIONS PRECEDENT. From the date hereof to the
Closing, Apple and the Sellers shall use their best efforts to cause all
conditions precedent to the obligations of the Purchaser hereunder to be
satisfied by the Closing.
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4.4 NO SOLICITATION. From the date hereof until 5:00 p.m., Dallas time,
on January 31, 1996, Apple and the Sellers shall not, and shall use their best
efforts to cause the officers, directors, employees, and agents of Apple not to,
(a) solicit, initiate or encourage the submission of proposals or offers from
any person or entity for, or enter into any agreement or arrangement relating
to, any acquisition or purchase of any or all of the assets or securities of
Apple, or any merger, consolidation, or business combination with Apple or (b)
participate in any negotiations regarding, or, except as required by legal
process, furnish to any other person or entity any information with respect to,
or otherwise cooperate in any way with, or assist or participate in, facilitate,
or encourage, any effort or attempt by any other person or entity to do or seek
any of the foregoing. In addition, until 5:00 p.m., Dallas time, on January 31,
1996, Apple and the Sellers agree that neither Apple nor either Seller will
enter into any agreement or consummate any transaction that would interfere with
the consummation of the transactions contemplated by this Agreement. Apple and
the Sellers shall promptly notify the Purchaser if any such proposal or offer
described in this Section 4.4, or any inquiry or contact with any person or
entity with respect thereto, is made. The notification under this Section 4.4
shall include the identity of the person or entity making such acquisition,
offer or other proposal, the terms thereof, and any other information with
respect thereto as the Purchaser may reasonably request.
4.5 NOTICE OF DEVELOPMENTS. From the date hereof to the Closing, Apple
and the Sellers shall, as soon as practicable upon Apple or either Seller
becoming aware thereof, notify the Purchaser of any material problems or
developments with respect to the business, operations, assets, or prospects of
Apple. From the date hereof to the Closing, the Purchaser shall, as soon as
practicable upon becoming aware thereof, notify the Sellers of any material
problems or developments with respect to the business, operations, assets, or
prospects of the Purchaser or ProNet.
4.6 NOTICE OF BREACH. From the date hereof to the Closing, Apple and each
Seller shall, immediately upon Apple or either Seller becoming aware thereof,
give detailed written notice to the Purchaser of the occurrence of, or the
impending or threatened occurrence of, any event that would cause or constitute
a breach, or would have caused or constituted a breach had such event occurred
or been known to Apple or the Sellers prior to the date of this Agreement, of
any of their respective covenants, agreements, representations, or warranties
contained or referred to herein or in any document delivered in accordance with
the terms hereof.
4.7 NOTICE OF LITIGATION. From the date hereof to the Closing, Apple and
the Sellers shall, immediately upon Apple or either Seller becoming aware
thereof, notify the Purchaser of (a) any suit, action, or proceeding (including,
without limitation, any Tax Action or proceeding involving a labor dispute or
grievance or union recognition) to which Apple becomes a party or which is
threatened against Apple, (b) any order or decree or any complaint praying for
an order or decree restraining or enjoining the consummation of this Agreement
or the transactions contemplated hereby, or (c) any notice from any tribunal of
its intention to institute an investigation into, or to institute a suit or
proceeding to restrain or enjoin the consummation of, this Agreement or the
transactions contemplated hereby or to nullify or render ineffective this
Agreement or such transactions if consummated.
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4.8 CONTINUATION OF INSURANCE COVERAGE. From the date hereof to the
Closing, Apple shall keep (and the Sellers shall cause Apple to keep) in full
force and effect insurance coverage for Apple and its assets and operations
comparable in amount and scope to the coverage now maintained covering Apple and
its assets and operations.
4.9 MAINTENANCE OF CREDIT TERMS. From the date hereof to the Closing,
Apple shall continue (and the Sellers shall cause Apple to continue) to effect
sales and leases of its products only on the terms that have historically been
offered by Apple or on such other terms which are no less favorable to Apple.
4.10 UPDATING INFORMATION. As of the Closing, Apple and the Sellers shall
update all information set forth in the schedules to this Agreement.
4.11 INTERIM OPERATIONS OF APPLE.
(a) From the date hereof to the Closing, Apple shall conduct (and the
Sellers shall cause Apple to conduct) its business only in the ordinary
course consistent with past practice, and Apple shall not, unless the
Purchaser gives its prior written approval, (i) issue or sell, or authorize
for issuance or sale, additional shares of any class of capital stock, or
issue, grant, or enter into any subscription, option, warrant, right,
convertible security, or other agreement or commitment of any character
obligating Apple to issue securities, (ii) declare, set aside, make, or pay
any dividend or other distribution with respect to its capital stock (other
than dividends or distributions consistent with past practices that will
not adversely effect the operating cash flow of Apple and as expressly
permitted by SECTION 9.5 hereof), (iii) redeem, purchase, or otherwise
acquire, directly or indirectly, any of its capital stock, (iv) except in
the ordinary course of business, sell, pledge, dispose of, or encumber, or
agree to sell, pledge, dispose of (other than the assignment of that
certain Unipage 80 terminal to Best Page or another designee of Xxxxxxx),
or encumber, any of its assets, or authorize any capital expenditure in
excess of $5,000, (v) acquire (by merger, consolidation, or acquisition of
stock or assets) any corporation, partnership, or other business
organization or division thereof, or enter into any contract, agreement,
commitment, or arrangement with respect to any of the foregoing, (vi) incur
any indebtedness for borrowed money, issue any debt securities, or enter
into or modify any contract, agreement, commitment, or arrangement with
respect thereto, (vii) enter into, amend, or terminate any employment or
consulting agreement with any director, officer, consultant, or key
employee, enter into, amend, or terminate any employment or consulting
agreement with any other person otherwise than in the ordinary course of
business, take any action intended to increase or decrease the number of
persons employed by Apple, or take any action with respect to the grant or
payment of any severance or termination pay other than pursuant to policies
or agreements of Apple in effect on the date hereof, (viii) enter into,
extend, or renew any lease for office space, or (ix) except as required by
law, adopt, amend, or terminate any bonus, profit sharing, compensation,
stock option, pension, retirement, deferred compensation, employment, or
other employee benefit plan, agreement, trust, fund, or arrangement for the
benefit or welfare of any officer,
16
employee, or sales representative of Apple, so as to create any liability
under Article IV of ERISA to any entity, (x) grant any increase in
compensation to any director, officer, consultant, or key employee, or
(xi) grant any increase in compensation to any other employee or
consultant except in the ordinary course of business consistent with
past practice.
(b) From the date hereof to the Closing, Apple shall use (and the
Sellers shall cause Apple to use) their best efforts to preserve intact the
business organization of Apple, to keep available in all material respects
the services of its present officers and key employees, to preserve intact
Apple's banking relationships and credit facilities, to preserve the
goodwill of those having business relationships with Apple, and to comply
with all applicable laws.
4.12 FINANCIAL STATEMENTS. From the date hereof until the Closing, as soon
as available, and in any event within 30 days after the end of each calendar
month beginning with July 1995, Apple shall furnish to the Purchaser a balance
sheet, statement of income and retained earnings, and statement of changes in
financial position of Apple for such month prepared by Apple as an internal
management control consistent with past practices. Such monthly financial
statements shall fairly present the financial position, results of operations,
and changes in financial position as of the indicated dates and for the
indicated periods.
4.13 LICENSES. From the date hereof until the Closing, Apple and the
Sellers shall cooperate and assist fully in connection with Purchaser's efforts
to obtain, prior to the Closing Date, all consents and authorizations that may
be required in connection with the transfer of each of the Licenses listed on
SCHEDULE 3.11.
4.14 RESIGNATIONS OF DIRECTORS AND OFFICERS. Apple and the Sellers shall
cause all directors and officers of Apple to deliver their written resignations
to the Purchaser, which resignations shall be effective at or before the Closing
and shall be in form and substance satisfactory to the Purchaser. Each such
resignation shall state that the Purchaser is not in any way indebted or
obligated to the resigning party for termination pay, loans, advances, or
otherwise. At the Closing, the Sellers shall cause nominees of the Purchaser to
be elected as the directors of each Company.
4.15 BEST PAGE ASSETS. From the date hereof until the Closing, Xxxxxxx
agrees to cause Best Page not to sell, pledge, dispose of, or encumber or agree
to sell, pledge, dispose of, or encumber any of the Chicago-area paging assets
of Best Page.
4.16 RESTRICTIVE LEGENDS. The Purchaser agrees to cause the restrictive
legends described in Section 3.32 above to be removed from the certificates
representing shares of ProNet Common Stock delivered hereunder at such time as
such removal is permitted under applicable federal and state securities laws.
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ARTICLE 5
REGULATORY APPROVALS
With the full cooperation and assistance of Apple and the Sellers as
contemplated in Section 4.13 hereof, the Purchaser has filed with the FCC, the
FAA, and with all state regulatory agencies, commissions, or other entities
having jurisdiction over the System, applications for consent to the transfer to
the Purchaser of the Licenses or any similar state authorizations, currently
held by Apple. The Purchaser shall use all commercially reasonable efforts to
prosecute such applications so as to permit the Closing to occur. Approval of
the aforementioned applications by the FCC, the FAA, and by any applicable state
agencies, commissions, or other entities shall be by Final Order (and such
approvals shall hereinafter collectively be referred to as the "Final Order").
As used in this Agreement, any such approval shall only be a Final Order if
(a) the action of the subject governmental agency approving the application has
not been reversed, stayed, enjoined, set aside, annulled, or suspended, (b) with
respect to such approval, no timely request for stay, motion, or petition for
reconsideration or rehearing, application, or request for review, or notice of
appeal or other judicial petition for review is pending, and (c) the time for
filing any such request, motion, petition, application, appeal, or notice, and
for the entry of orders staying, reconsidering, or reviewing the subject
governmental agency's own motion, shall have expired. Any action by a
governmental authority approving the applications subject to conditions (other
than conditions concerning notification of the consummation of this Agreement,
other conditions that the FCC routinely attaches to grants of this type and
conditions applicable solely to Apple or the Sellers that are satisfied prior to
Closing) shall not be deemed a Final Order until such time as the Purchaser
notifies Apple in writing of its willingness to accept such conditions. In
addition, if prior to the date on which any such action would become a Final
Order, the Purchaser does not elect to accept any such conditions, the Purchaser
shall have the right to terminate this Agreement upon written notice to Apple
and the Sellers and shall be relieved of all obligations hereunder as provided
in Article 7 hereof.
ARTICLE 6
CONDITIONS TO CLOSING
6.1 CONDITIONS TO OBLIGATIONS OF THE PURCHASER. The obligations of the
Purchaser to consummate the transactions contemplated hereby are subject to the
fulfillment of each of the following conditions:
(a) The representations and warranties of Apple and the Sellers
contained in this Agreement shall be true and correct in all material
respects at and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the Closing;
Apple and the Sellers shall have performed and complied in all material
respects with all agreements required by this Agreement to be performed or
complied with by Apple and the Sellers at or prior to the Closing;
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and the Purchaser shall have received a certificate, dated as of the
Closing Date, signed by the President of Apple and by each Seller to
the foregoing effects.
(b) No action or proceeding shall have been instituted or threatened
for the purpose or with the possible effect of enjoining or preventing the
consummation of this Agreement or seeking damages on account thereof.
(c) Each of the Sellers shall have delivered to the Purchaser stock
certificates evidencing the Shares owned by such Seller duly endorsed or
accompanied by duly executed stock powers assigning such Shares to the
Purchaser and otherwise in good form for transfer.
(d) The Purchaser shall have received an opinion of Xxxxxxx
Xxxxxxxxxx, Esq., counsel for Apple and the Sellers, dated as of the
Closing Date, substantially in the form attached hereto as EXHIBIT B.
(e) The Purchaser shall have received an opinion of Xxxx & Xxxxxxx,
FCC counsel for Apple, dated as of the Closing Date, substantially in the
form attached hereto as EXHIBIT C.
(f) Prior to the Closing, there shall not have occurred any material
casualty or damage (whether or not insured) to any facility, property,
asset, or equipment used in connection with the operation of Apple's
business; there shall have been no material adverse change in the financial
condition, business, properties, operations, or prospects of Apple since
June 30, 1995; and Apple shall have conducted its operations only in the
ordinary course consistent with past practices.
(g) The FCC and all applicable state regulatory agencies,
commissions, or other entities, by Final Order, shall have granted any
required consent to the sale, transfer, and assignment of the Transferred
Assets to the Purchaser and to the Purchaser's ownership and operation of
the Transferred Assets.
(h) As of the Closing Date, Apple shall have at least 41,500 pagers
in service in the System and the Purchaser shall have received a
certificate, dated as of the Closing Date, signed by the President of the
Seller and the Sellers setting forth the number and type of pagers in
service in the System.
(i) As of the Closing Date, Apple's inventory shall include at least
850 new, unused current-model pagers and the Purchaser shall have received
a certificate, dated as of the Closing Date, signed by the President of
Apple to the foregoing effect.
(j) As of the Closing Date, the cash and cash equivalents of Apple
(excluding accounts receivable) shall equal or exceed the amount of Apple's
accounts payable.
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(k) All consents and approvals (i) listed on SCHEDULE 3.6 and
(ii) otherwise required in connection with the execution, delivery, and
performance of this Agreement shall have been obtained or waived and all
such consents and approvals shall be in form and content reasonably
satisfactory to the Purchaser.
(l) All necessary action (corporate or otherwise) shall have been
taken by Apple to authorize, approve, and adopt this Agreement and the
consummation and performance of the transactions contemplated hereby, and
the Purchaser shall have received a certificate, dated as of the Closing
Date, signed by the President of Apple and the Sellers to the foregoing
effect.
(m) Each of the Sellers shall have entered into a Noncompetition
Agreement (a "Noncompetition Agreement") with the Purchaser substantially
in the form attached hereto as EXHIBIT D.
(n) The Sellers and ProNet shall have entered into a Registration
Rights Agreement substantially in the form of EXHIBIT E providing that
ProNet shall prepare and file with the Securities and Exchange Commission
(the "SEC") a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 (or any appropriate similar rule that
may be adopted by the SEC) under the Securities Act (the "Shelf
Registration") covering all of the ProNet Common Stock issued to the
Sellers pursuant to this Agreement.
(o) The Sellers, Best Page, the Purchaser, and the Escrow Agent shall
have entered into an Indemnification Escrow Agreement substantially in the
form of EXHIBIT A attached hereto.
(p) The Purchaser and Best Page shall have completed the transactions
contemplated by that certain Assignment and Xxxx of Sale (herein so called)
by and among the Purchaser, Best Page and Xxxxxxx substantially in the form
of EXHIBIT G attached hereto and the Purchaser, Best Page, and Xxxxxxx
shall have entered into an Indemnification Agreement substantially in the
form of EXHIBIT H attached hereto.
(q) The Purchaser shall have received the resignations contemplated
by Section 4.14 hereof.
(r) At the Closing, the assets of Apple shall include an owner's
title policy in form and substance acceptable to the Purchaser with respect
to the real property of Apple located at 0000-00 X. Xxxxxx Xxx.
(s) Apple and the Sellers shall have delivered such good standing
certificates, officer's certificates, and similar documents and
certificates as counsel for the Purchaser shall have reasonably requested
prior to the Closing Date.
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The decision of the Purchaser to consummate the transactions contemplated hereby
without the satisfaction of any of the preceding conditions shall not constitute
a waiver of any of Apple's or any Sellers's respective representations,
warranties, covenants, or indemnities herein.
6.2 CONDITIONS TO OBLIGATIONS OF THE SELLERS. The obligations of the
Sellers to consummate the transactions contemplated hereby are subject to the
fulfillment of the following conditions:
(a) The representations and warranties of the Purchaser contained in
this Agreement shall be true and correct in all material respects at and as
of the Closing with the same effect as though such representations and
warranties had been made as of the Closing; all agreements to be performed
hereunder by the Purchaser at or prior to the Closing shall have been
performed in all material respects; and the Sellers shall have received a
certificate, dated as of the Closing Date, signed by the President of the
Purchaser to the foregoing effects.
(b) No action or proceeding shall have been instituted or threatened
for the purpose or with the possible effect of enjoining or preventing the
consummation of this Agreement or seeking damages on account thereof.
(c) The Purchaser shall have delivered to each Seller a certified
bank check or wire transfer in the amount of the cash portion of the
Purchase Price to be paid on the Closing Date and a certificate or
certificates representing the shares of ProNet Common Stock to be delivered
to such Seller as provided in SCHEDULE 1.3 in accordance with and as
specified in Section 1.4 hereof.
(d) The Sellers shall have received an opinion of Xxxxxx & Xxxxxx
L.L.P., counsel for the Purchaser, dated as of the Closing Date, in the
form attached hereto as EXHIBIT F.
(e) The Purchaser shall have entered into Noncompetition Agreements
with each of the Sellers substantially in the form of EXHIBIT D attached
hereto and shall have delivered to the Sellers the amount of the
consideration specified therein by certified bank check or wire transfer.
(f) The Sellers, Best Page, the Purchaser and the Escrow Agent shall
have entered into an Indemnification Escrow Agreement substantially in the
form of EXHIBIT A attached hereto.
(g) The Sellers and ProNet shall have entered into a Registration
Rights Agreement substantially in the form of EXHIBIT E attached hereto.
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(h) The Purchaser and Best Page shall have completed the transactions
contemplated by the Assignment and Xxxx of Sale.
(i) All necessary action (corporate or otherwise) shall have been
taken by the Purchaser to authorize, approve, and adopt this Agreement and
the consummation and performance of the transactions contemplated hereby,
and the Sellers shall have received a certificate, dated as of the Closing
Date, signed by an officer of the Purchaser to the foregoing effect.
(j) The Purchaser shall have delivered such good standing
certificates, officer's certificates, and similar documents and
certificates as counsel for the Sellers shall have reasonably requested
prior to the Closing Date.
The decision of the Sellers to consummate the transactions contemplated hereby
without the satisfaction of any of the preceding conditions shall not constitute
a waiver of any of the Purchaser's representations, warranties, covenants, or
indemnities herein.
ARTICLE 7
TERMINATION
This Agreement may be terminated prior to the Closing by (a) the mutual
consent of the Purchaser and the Sellers, (b) the Sellers upon the failure of
the Purchaser to perform or comply in all material respects with each of its
covenants or agreements contained herein prior to the Closing or if each
representation or warranty of the Purchaser hereunder shall not have been true
and correct as of the time at which such representation or warranty was made,
(c) the Purchaser upon the failure of Apple or either Seller to perform or
comply in all material respects with each of its, his or her covenants or
agreements contained herein prior to the Closing or if each representation or
warranty of Apple or the Sellers hereunder shall not have been true and correct
as of the time at which such representation or warranty was made, (d) the
Purchaser in accordance with the provisions of Article 5 hereof, and (e) the
Sellers or the Purchaser if the Closing does not occur by January 31, 1996;
provided, that no party may terminate this Agreement pursuant to (b), (c), or
(e) above if such party is, at the time of any such attempted termination, in
breach of any term hereof.
ARTICLE 8
INDEMNIFICATION
8.1 INDEMNIFICATION OF THE PURCHASER. Apple and the Sellers, each jointly
and severally agree to indemnify and hold harmless the Purchaser and each
officer, director, employee, consultant, stockholder, and affiliate of the
Purchaser (collectively, the "Purchaser Indemnified Parties") from and against
any and all damages, losses, claims, liabilities, demands, charges, suits,
penalties, costs, and expenses (including court costs and attorneys'
22
fees and expenses incurred in investigating and preparing for any litigation
or proceeding) (collectively, "Indemnified Costs") which any of the Purchaser
Indemnified Parties may sustain, or to which any of the Purchaser Indemnified
Parties may be subjected, arising out of any breach or default by Apple or
either Seller of or under any of the representations, warranties, covenants,
agreements, or other provisions of this Agreement or any agreement or
document executed in connection herewith.
8.2 INDEMNIFICATION OF THE SELLERS. The Purchaser agrees to indemnify and
hold harmless each of the Sellers (collectively, the "Seller Indemnified
Parties" and together with the Purchaser Indemnified Parties, the "Indemnified
Parties") from and against any and all damages, losses, claims, liabilities,
demands, charges, suits, penalties, costs, and expenses (including court costs
and reasonable attorneys' fees and expenses incurred in investigating and
preparing for any litigation or proceeding) (collectively, the "Seller
Indemnified Costs" and together with the Purchaser Indemnified Costs, the
"Indemnified Costs") which any of the Seller Indemnified Parties may sustain, or
to which any of the Seller Indemnified Parties may be subjected, arising out of
or relating to (a) any debts, claims, obligations or liabilities of Apple which
become due, are incurred or are to be performed after the Closing ("Post-Closing
Liabilities"), other than (i) any Post-Closing Liabilities arising out of or
relating to any breach or default by Apple or either Seller of any of the
representations, warranties, covenants, agreements or other provisions of this
Agreement or any agreement or document executed in connection herewith and
(ii) any Tax liability of the Sellers, Apple or Best Page relating to the period
prior to the Closing Date or resulting from the transactions contemplated
hereunder, or (b) any breach or default by the Purchaser of or under any of the
representations, warranties, covenants, agreements, or other provisions of this
Agreement or any agreement or document executed in connection herewith.
8.3 DEFENSE OF THIRD-PARTY CLAIMS. An Indemnified Party shall give prompt
written notice to any entity or person who is obligated to provide
indemnification hereunder (an "Indemnifying Party") of the commencement or
assertion of any action, proceeding, demand, or claim by a third party
(collectively, a "third-party action") in respect of which such Indemnified
Party shall seek indemnification hereunder. Any failure so to notify an
Indemnifying Party shall not relieve such Indemnifying Party from any liability
that it or he may have to such Indemnified Party under this Article 8 unless the
failure to give such notice materially and adversely prejudices such
Indemnifying Party. The Indemnifying Parties shall have the right to assume
control of the defense of, settle, or otherwise dispose of such third-party
action on such terms as they deem appropriate; provided, however, that:
(a) The Indemnified Party shall be entitled, at his, her, or its own
expense, to participate in the defense of such third-party action
(provided, however, that the Indemnifying Parties shall pay the attorneys'
fees of the Indemnified Party if (i) the employment of separate counsel
shall have been authorized in writing by any such Indemnifying Party in
connection with the defense of such third-party action, (ii) the
Indemnifying Parties shall not have employed counsel reasonably
satisfactory to the Indemnified Party to have charge of such third-party
action, (iii) the Indemnified Party shall have reasonably concluded that
there may be defenses available to such Indemnified Party that are
different from or additional to those available to the
23
Indemnifying Parties, or (iv) the Indemnified Party's counsel shall have
advised the Indemnified Party in writing, with a copy to the
Indemnifying Parties, that there is a conflict of interest that could
make it inappropriate under applicable standards of professional conduct
to have common counsel);
(b) The Indemnifying Parties shall obtain the prior written approval
of the Indemnified Party before entering into or making any settlement,
compromise, admission, or acknowledgement of the validity of such third-
party action or any liability in respect thereof if, pursuant to or as a
result of such settlement, compromise, admission, or acknowledgement,
injunctive or other equitable relief would be imposed against the
Indemnified Party or if, in the opinion of the Indemnified Party, such
settlement, compromise, admission, or acknowledgement could have a material
adverse effect on its business or, in the case of an Indemnified Party who
is a natural person, on his or her assets or interests;
(c) No Indemnifying Party shall consent to the entry of any judgment
or enter into any settlement that does not include as an unconditional term
thereof the giving by each claimant or plaintiff to each Indemnified Party
of a release from all liability in respect of such third-party action; and
(d) The Indemnifying Parties shall not be entitled to control (but
shall be entitled to participate at their own expense in the defense of),
and the Indemnified Party shall be entitled to have sole control over, the
defense or settlement, compromise, admission, or acknowledgement of any
third-party action (i) as to which the Indemnifying Parties fail to assume
the defense within a reasonable length of time or (ii) to the extent the
third-party action seeks an order, injunction, or other equitable relief
against the Indemnified Party which, if successful, would materially
adversely affect the business, operations, assets, or financial condition
of the Indemnified Party; PROVIDED, HOWEVER, that the Indemnified Party
shall make no settlement, compromise, admission, or acknowledgement that
would give rise to liability on the part of any Indemnifying Party without
the prior written consent of such Indemnifying Party.
The parties hereto shall extend reasonable cooperation in connection with the
defense of any third-party action pursuant to this Article 8 and, in connection
therewith, shall furnish such records, information, and testimony and attend
such conferences, discovery proceedings, hearings, trials, and appeals as may be
reasonably requested.
8.4 DIRECT CLAIMS. In any case in which an Indemnified Party seeks
indemnification hereunder which is not subject to Section 8.3 hereof because no
third-party action is involved, the Indemnified Party shall notify the
Indemnifying Parties in writing of any Indemnified Costs which such Indemnified
Party claims are subject to indemnification under the terms hereof. The failure
of the Indemnified Party to exercise promptness in such notification shall not
amount to a waiver of such claim unless the resulting delay materially
prejudices the position of the Indemnifying Parties with respect to such claim.
24
8.5 NO CONTRIBUTION. In the event the Closing occurs, the Sellers, and
not Apple, shall be fully liable for any Purchaser Indemnified Costs sustained
by the Purchaser Indemnified Parties; accordingly, the Sellers shall not be
entitled to contribution or any other payments from Apple for any Purchaser
Indemnified Costs that the Sellers are obligated to pay pursuant to this
Agreement or under applicable law.
8.6 ESCROW. On the Closing Date, the Purchaser, the Sellers, Best Page,
and the Escrow Agent will enter into the Indemnification Escrow Agreement in
accordance with which the Purchaser shall, at Closing, deposit $404,000 with the
Escrow Agent. If any claim for indemnification is made by a Purchaser
Indemnified Party pursuant to this Article 8 prior to the Release Date (as
defined in the Indemnification Escrow Agreement), such Purchaser Indemnified
Party may apply for payment of any such Purchaser Indemnified Costs up to the
amount of $404,000 in accordance with the provisions of the Indemnification
Escrow Agreement and this Agreement.
ARTICLE 9
MISCELLANEOUS
9.1 COLLATERAL AGREEMENTS, AMENDMENTS, AND WAIVERS. This Agreement
(together with the documents delivered in connection herewith) supersedes all
prior documents, understandings, and agreements, oral or written, relating to
this transaction, other than the provisions regarding confidentiality set forth
in paragraph 2 of that certain letter of intent dated July 10, 1995, among the
parties hereto and constitutes the entire understanding among the parties hereto
with respect to the subject matter hereof. Any modification or amendment to, or
waiver of, any provision of this Agreement (or any document delivered in
connection herewith unless otherwise expressly provided therein) may be made
only by an instrument in writing executed by the party against whom enforcement
thereof is sought.
9.2 RESTRICTION ON TRANSFER OF PRONET COMMON STOCK. In consideration of
the benefits to be received by the Sellers hereunder, each Seller hereby agrees
and acknowledges that the shares of ProNet Common Stock to be received by such
Seller on the Closing Date shall be subject to the following restrictions on
transfer. The Seller shall only be permitted to sell, assign, transfer, grant
any options for the purchase of, or otherwise dispose (a "Disposition") of that
number of shares of ProNet Common Stock equal to 8.33 percent of the total
number of shares of ProNet Common Stock to be delivered to such Seller at
Closing in each calendar month following the Closing Date, for a period of 12
calendar months beginning on the three-month anniversary of the Closing Date,
provided that Dispositions of any shares of ProNet Common Stock so released may
be made at any time and from time to time after such release. The Sellers shall
not be obligated to transfer any of the ProNet Common Stock received hereunder
and, upon the expiration of 15 months following the Closing Date, all of such
ProNet Common Stock shall be released from the foregoing restriction.
9.3 SUCCESSORS AND ASSIGNS. No rights or obligations of any party hereto
under this Agreement may be assigned (except that the Purchaser may assign its
rights and
25
obligations to any affiliate (as that term is defined in Rule 144 under the
Securities Act) of the Purchaser or to any successor entity to the Purchaser
whether pursuant to a sale of all or substantially all of the Purchaser's
assets, the merger, consolidation, liquidation, or dissolution of the
Purchaser, or otherwise). In the event that the Purchaser's rights are
assigned to any successor entity, then that portion of the Purchase Price
that was to be paid in ProNet Common Stock shall be paid in cash. Any
assignment, dissolution, or liquidation in violation of the foregoing shall
be null and void. Subject to the preceding sentences of this Section 9.3,
the provisions of this Agreement (and, unless otherwise expressly provided
therein, of any document delivered pursuant to this Agreement) shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors, and permitted assigns.
9.4 EXPENSES. Each of the parties hereto shall pay its or his own
respective costs and expenses incurred in connection with this Agreement. Apple
and the Purchaser shall each pay one-half of any administrative, application,
and filing costs incurred in connection with regulatory approvals described in
Article 5 hereof.
9.5 SURPLUS WORKING CAPITAL. At Closing, the Sellers shall be entitled to
dividend or otherwise distribute the cash and cash equivalents of Apple
(excluding Apple's accounts receivable) in excess of the amount of Apple's
accounts payable as of such date.
9.6 INVALID PROVISIONS. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws, such provision
shall be fully severable from this Agreement, this Agreement shall be construed
and enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance from this
Agreement. 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 terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid, and enforceable.
9.7 WAIVER. No failure or delay on the part of any party in exercising
any right, power, or privilege hereunder or under any of the documents delivered
in connection with this Agreement shall operate as a waiver of such right,
power, or privilege; nor shall any single or partial exercise of any such right,
power, or privilege preclude any other or future exercise thereof or the
exercise of any other right, power, or privilege.
9.8 NOTICES. Any notices required or permitted to be given under this
Agreement (and, unless otherwise expressly provided therein, under any document
delivered in connection with this Agreement) shall be given in writing and shall
be deemed received (a) when personally delivered to the relevant party at such
party's address as set forth below, (b) when confirmed if delivered by
telefacsimile or similar device, or (c) if sent by mail, on the third day
following the date when deposited in the United States mail, certified or
registered mail, postage prepaid, to the relevant party at its or his address
indicated below:
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If to the Purchaser: Contact Communications Inc.
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Xxxx X. Xxxxx, Esq.
Fax No: (000) 000-0000
With a copy to: Xxxxxx & Xxxxxx L.L.P.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Xxxx Early, Esq.
Fax No: (000) 000-0000
If to Apple Apple Communication, Inc.
or the Sellers: Xxxxxxxxx Xxxxxxx
Xxxx XxXxxxxx
0000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax No: (000) 000-0000
With a copy to: Xxxxxxx Xxxxxxxxxx, Esq.
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax No.: (000) 000-0000
Each party may change its or his address for purposes of this Section 9.8 by
proper notice to the other parties.
9.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND COVENANTS. Regardless of
any investigation at any time made by or on behalf of any party hereto or of any
information any party may have in respect thereof, all covenants, agreements,
representations, and warranties made hereunder or pursuant hereto or in
connection with the transactions contemplated hereby shall survive the Closing.
9.10 PUBLIC ANNOUNCEMENT. No public announcement shall be made by Apple or
the Sellers with respect to the transactions contemplated hereby without the
approval of the Purchaser and no public announcement shall be made by the
Purchaser with respect to the transactions contemplated hereby without the
approval of Xxxxxxx, unless otherwise required by law.
9.11 FURTHER ASSURANCES. From time to time hereafter, (a) at the request
of the Purchaser, but without further consideration, Apple and the Sellers shall
execute and deliver such other instruments of conveyance, assignment, transfer,
and delivery and take such other action as the Purchaser may reasonably request
in order more effectively to consummate the transactions contemplated hereby,
and (b) at the request of Apple or the Sellers, but
27
without further consideration, the Purchaser shall execute and deliver such
other certificates, statements, and documents, and take such other action as
Apple or the Sellers may reasonably request in order to more effectively
consummate the transactions contemplated hereby.
9.12 NO THIRD-PARTY BENEFICIARIES. Except for the Indemnified Parties not
a party to this Agreement, no person or entity not a party to this Agreement
shall be deemed to be a third-party beneficiary hereunder or entitled to any
rights hereunder.
9.13 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois.
9.14 HEADINGS. The headings, captions, and arrangements used in this
Agreement are, unless specified otherwise, for convenience only and shall not be
deemed to limit, amplify, or modify the terms of this Agreement or affect the
meaning hereof.
9.15 SECTIONS; EXHIBITS. All references to "Sections", "Subsections",
"Schedules", "Exhibits" herein are, unless specifically indicated otherwise,
references to sections, subsections, schedules, and exhibits of and to this
Agreement. All schedules and exhibits attached hereto are made a part hereof
for all purposes, the same as set forth herein verbatim, it being understood
that if any exhibit attached hereto which is to be executed and delivered
contains blanks, the same shall be completed correctly and in accordance with
the terms and provisions contained and as contemplated herein prior to or at the
time of the execution and delivery thereof.
9.16 NUMBER AND GENDER OF WORDS. Whenever herein the singular number is
used, the same shall include the plural where appropriate, and words of any
gender shall include each other gender where appropriate.
9.17 SPECIFIC PERFORMANCE. The parties hereto acknowledge and agree that,
without limiting any other remedy available to the Purchaser at law or in
equity, the Purchaser shall be able to specifically enforce the terms of this
Agreement.
28
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement in
one or more counterparts (all of which shall constitute one and the same
agreement) as of the day and year first above written.
CONTACT COMMUNICATIONS INC.
By: /s/ XXXX X. XXXXX
-------------------------------------------------
Xxxx X. Xxxxx, Vice President and General Counsel
APPLE COMMUNICATION, INC.
By: /s/ XXXXXXXXX XXXXXXX
-------------------------------------------------
Xxxxxxxxx Xxxxxxx, President
/s/ XXXXXXXXX XXXXXXX
-----------------------------------------------------
Xxxxxxxxx Xxxxxxx
/s/ XXXX XXXXXXXX
-----------------------------------------------------
Xxxx XxXxxxxx
29
GUARANTEE
As an inducement to Apple Communication, Inc., an Illinois corporation,
Xxxxxxxxx Xxxxxxx, and Xxxx XxXxxxxx (collectively, the "Shareholders") entering
into that certain Stock Purchase Agreement (the "Agreement"), dated today, with
Contact Communications Inc., a Delaware corporation (the "Purchaser"), ProNet
Inc. ("ProNet"), a Delaware corporation and the owner of all of the issued and
outstanding capital stock of the Purchaser, hereby guarantees the full and
prompt performance by the Purchaser of all obligations of the Purchaser under
the Agreement, including the payment, when due, of all sums owing by the
Purchaser to the Shareholders under the Agreement. This Guarantee shall be
governed by the laws of the State of Illinois.
PRONET INC.
By: /s/ XXXX X. XXXXX
---------------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President and General Counsel
EXHIBIT A
FORM OF
INDEMNIFICATION ESCROW AGREEMENT
The undersigned, Best Page, Inc., an Illinois corporation ("Best Page"),
Xxxxxxxxx Xxxxxxx ("Xxxxxxx"), Xxxx XxXxxxxx ("XxXxxxxx" and, collectively with
Best Page and Xxxxxxx, the "Sellers") and Contact Communications Inc.
("Purchaser" and, collectively with the Sellers, the "Undersigned"), in order to
designate NationsBank of Texas, National Association (the "Depository") as the
Depository for the Undersigned for the purposes and upon the terms and
conditions herein set forth, do hereby represent and warrant to, and agree with
each other and the Depository, as follows:
1. APPOINTMENT OF THE DEPOSITORY. The Depository is hereby appointed
Depository for the Undersigned with respect to the "Escrowed Sum" as that term
is herein defined.
2. THE ESCROWED SUM. At the closing (the "Closing") of the transactions
contemplated by (a) that certain Stock Purchase Agreement dated as of
October ___, 1995 (the "Apple Agreement"), by and among Zarcone, DiFoggio, Apple
Communication, Inc., an Illinois corporation ("Apple"), and the Purchaser and
(b) that certain Assignment and Xxxx of Sale (the "Xxxx of Sale") by and among
the Purchaser, Best Page, and Xxxxxxx, the Undersigned shall deposit with the
Depository, as custodian and depository, an aggregate of $500,000, and direct
that same be held and disposed of by the Depository as herein provided.
3. THE DEPOSITORY'S DUTIES AND AUTHORITY TO ACT.
(a) Except as may be otherwise provided in paragraph 22, in which event
the special instructions in said paragraph 22 shall be controlling, the
Depository shall hold the Escrowed Sum in safekeeping and deliver the same or
any part or parcel thereof, including the interest earned from investments made
pursuant to paragraph 20 hereof, only (i) to one or more of the Undersigned in
accordance with and upon the written instructions of each of the other of the
Undersigned and/or (ii) in accordance with and upon the written instructions of
all of the Undersigned.
(b) When instructions from more than one of the Undersigned are required,
such instructions may be given by separate instruments of similar tenor. Any of
the Undersigned may hereafter act through an agent or attorney-in-fact only if
written evidence of authority in form and substance satisfactory to the
Depository is furnished to the Depository and agreed to by the Depository. Best
Page hereby authorizes the Depository to rely on instructions from Xxxxxxx with
respect to any item as to which instructions from Best Page are required.
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(c) The Depository may act upon any written notice, request, waiver,
consent, certificate, receipt, authorization, power of attorney or other
document which it in good faith believes to be genuine.
(d) The Depository shall be deemed to have properly delivered any portion
of Escrowed Sum upon wire transfer of such amount to account designated in
writing to the Depository by the recipient thereof.
(e) In performing its duties under this Agreement, or upon the claimed
failure to perform any of its duties hereunder, the Depository shall not be
liable to anyone for damages, losses or expenses which may be incurred as a
result of the Depository so acting or failing to so act; provided, however, the
Depository shall not be relieved from liability for damages arising out of its
proven gross negligence or willful misconduct under this Agreement. The
Depository shall in no event incur any liability with respect to (i) any action
taken or omitted to be taken in good faith upon advice of legal counsel given
with respect to any questions relating to the duties and responsibilities of the
Depository hereunder or (ii) any action taken or omitted to be taken in reliance
upon any document delivered to the Depository by the Undersigned and believed by
it to be genuine and to have been signed or presented by the proper party or
parties.
(f) Payment of moneys hereunder shall be made by cashiers check or by wire
transfer of immediately available funds in accordance with instructions
contained in the applicable disbursement notice to the Depository.
4. OTHER AGREEMENTS. The Depository is not a party to, nor is it bound
by, nor need it give consideration to the terms or provisions of, any other
agreement or undertaking among the Undersigned or any of them, or between the
Undersigned or any of them and other persons, or any agreement or undertaking
which may be evidenced by or disclosed by the Escrowed Sum, it being the
intention of the parties hereto that the Depository assent to and be obligated
to give consideration only to the terms and provisions hereof. Unless otherwise
provided in paragraph 22, the Depository shall have no duty to determine or
inquire into the happening or occurrence of any event or contingency or the
performance or failure of performance of any of the Undersigned with respect to
arrangements or contracts with each other or with others, the Depository's sole
duty hereunder being to hold the Escrowed Sum and to dispose of and deliver the
same in accordance with instructions given to it as provided in paragraph 3.
5. STANDARD OF CARE.
(a) The Depository undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement and no implied covenants or
obligations shall be read into this Agreement against the Depository.
(b) If the Depository is required by the terms hereof to determine the
occurrence of any event or contingency, the Depository shall, in making such
determination, be liable only for its proven gross negligence or willful
misconduct, as determined in light of all the circumstances, including the time
and facilities available to it in the ordinary conduct of its
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business. In determining the occurrence of any such event or contingency the
Depository may request from any of the Undersigned or any other person such
reasonable additional evidence as the Depository in its sole discretion may
deem necessary to determine any fact relating to the occurrence of such event
or contingency, and may at any time inquire of and consult with others,
including without limitation, any of the Undersigned, and the Depository
shall not be liable for any damages resulting from its delay in acting
hereunder pending its receipt and examination of additional evidence
requested by it.
(c) Whenever the Depository is required by the terms hereof to take action
upon the occurrence of any event or contingency, the time prescribed for such
action shall in all cases be a reasonable time after written notice received by
the Depository for the happening of such event or contingency, provided however,
that this provision shall not be deemed to limit or reduce the time allowed the
Depository for action as provided in paragraph 5(b).
6. LIMITATION ON LIABILITY. The Depository shall not be responsible or
liable to the Undersigned or to any other person in any manner whatsoever for
the sufficiency, correctness, genuineness, effectiveness or validity of any of
the Escrowed Sum, or for the form or execution thereof, or for the identity or
authority of any person executing or depositing the same. If any of the
Undersigned are acting as agent for others, all of the Undersigned represent and
warrant that each such agent is authorized to make and enter into this
Agreement. This Agreement is a personal one between the Undersigned and the
Depository. The Depository is authorized by each of the Undersigned to rely
upon all representations, both actual and implied, of each of the Undersigned
and all other persons relating to this Agreement and/or the Escrowed Sum,
including without limitation representations as to marital status, authority to
execute and deliver this Agreement, notifications, receipts or instructions
hereunder, and relationships among persons, firms, corporations or other
entities, including those authorized to receive delivery hereunder, and the
Depository shall not be liable to any person in any manner by reason of such
reliance. The duties of the Depository hereunder shall be only to the
Undersigned, their respective successors, heirs, assigns, executors and
administrators and to no other person, firm, corporation or other entity
whatsoever.
7. TIME OF PERFORMANCE. Whenever under the terms hereof the time for
performance of any provision shall fall on a date which is not a regular
business day of the Depository, the performance thereof on the next succeeding
regular business day of the Depository shall be deemed to be in full compliance.
Whenever time is referred to in this Agreement, it shall be the time recognized
by the Depository in the ordinary conduct of its normal business transactions.
8. DEATH, DISABILITY, ETC. OF THE UNDERSIGNED. The death, disability,
bankruptcy, insolvency, reorganization or absence of any of the Undersigned
shall not affect or prevent performance by the Depository of its obligations or
its right to rely upon instructions received hereunder. However, in the event
of the death, disability, bankruptcy, insolvency, reorganization or absence of
any of the Undersigned, the Depository (without liability to any of the
Undersigned) may refrain from taking any action required or requested hereunder
until it has received such reasonable additional documentation as the Depository
may deem necessary to determine any fact relating to the occurrence of any such
event.
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9. INQUIRY AS TO THE ESCROWED SUM. The Depository shall provide prompt
confirmation to the Undersigned that the Escrowed Sum has been deposited and
invested in accordance with the terms hereof.
10. REMEDIES OF THE DEPOSITORY.
(a) As additional consideration for and as an inducement for the
Depository to act hereunder, it is understood and agreed that in the event of
any disagreement between the parties to this Agreement or in the event any other
person or entity claims an interest in the Escrowed Sum or any part thereof, and
such disagreement or claim results in adverse claims and demands being made by
them or any of them in connection with or for any part of the Escrowed Sum, the
Depository shall be entitled, at the option of the Depository, to refuse to
comply with the instructions or demands of the parties to this Agreement, or any
of such parties, so long as such disagreement or adverse claim shall continue.
In such event, the Depository shall not be required to make delivery or other
disposition of the Escrowed Sum. Anything herein to the contrary
notwithstanding, the Depository shall not be or become liable to the Undersigned
or any of them for the failure of the Depository to comply with the conflicting
or adverse demands of the Undersigned or any of such parties or of any other
persons or entities claiming an interest in the Escrowed Sum or any part
thereof. The Depository shall be entitled to refrain and refuse to deliver or
otherwise dispose of the Escrowed Sum or any part thereof or to otherwise act
hereunder, as stated above, unless and until (i) the rights of the parties and
all other persons and entities claiming an interest in the Escrowed Sum have
been duly adjudicated in a court having jurisdiction of the parties and the
Escrowed Sum or (ii) the parties to this Agreement and such other persons and
entities have reached an agreement resolving their differences and have notified
the Depository in writing of such agreement and have provided the Depository
with indemnity satisfactory to it against any liability, claims or damages
resulting from compliance by the Depository with such agreement. In addition to
the foregoing, the Depository shall have the right to tender into the registry
or custody of any court having jurisdiction, any part of or all of the Escrowed
Sum. Upon such tender, the parties hereto agree that the Depository shall be
discharged from all further duties under this Agreement; provided, however, that
the filing of any such legal proceedings shall not deprive the Depository of its
compensation hereunder earned prior to such filing and discharge of the
Depository of its duties hereunder.
(b) While any suit or legal proceeding arising out of or relating to this
Agreement or the Escrowed Sum or the Undersigned is pending, whether the same be
initiated by the Depository or by others, the Depository shall have the right at
its option to stop all further performance of this Agreement and instructions
received hereunder until all differences shall have been resolved by agreement
or until the rights of all parties shall have been fully and finally adjudicated
by the court. For purposes of any suit or legal proceeding arising out of or
relating to this Agreement to which the Depository may be a party, the
Undersigned hereby consent and submit to the jurisdiction of the appropriate
court, whether Federal or state, sitting in Dallas County, Texas. The rights of
the Depository under this paragraph are in addition to all other rights which it
may have by law or otherwise.
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11. RELIANCE ON COUNSEL. The Depository may from time to time consult
with legal counsel of its own choosing, other than Xxxxxx & Xxxxxx L.L.P., in
the event of any disagreement, or controversy, or question or doubt as to the
construction of any of the provisions hereof or its duties hereunder, and it
shall incur no liability and shall be fully protected in acting in good faith
in accordance with the opinion or instructions of such counsel. Any such
fees and expenses of such legal counsel shall be considered part of the fees
and expenses of the Depository described below.
12. FEES AND EXPENSES.
(a) The Undersigned hereby jointly and severally agree to pay the
Depository for its ordinary services hereunder the fees determined in
accordance with, and payable as specified in, the Schedule of Fees set forth
in Exhibit "A", attached hereto. In addition, the Undersigned hereby jointly
and severally agree to pay to the Depository its expenses incurred in
connection with this Agreement, including, but not limited to, legal fees and
expenses, in the event the Depository deems it necessary to retain counsel.
Such expenses shall be paid to the Depository within 10 days following
receipt by any of the Undersigned of a written statement setting forth such
expenses.
(b) The Undersigned jointly and severally agree that in the event any
controversy arises under or in connection with this Agreement or the Escrowed
Sum, or the Depository is made a party to or intervenes in any litigation
pertaining to this Agreement or the Escrowed Sum, to pay to the Depository
reasonable compensation for its extraordinary services and to reimburse the
Depository for all costs and expenses associated with such controversy or
litigation, including, but not limited to, legal fees and expenses.
(c) As security for all fees and expenses of the Depository hereunder
and any and all losses, claims, damages, liabilities and expenses incurred in
connection with the acceptance of appointment hereunder or with the
performance of its obligations under this Agreement and to secure the
obligation of the Undersigned to indemnify the Depository as set forth in
paragraph 21 hereof, the Depository is granted a security interest in and
lien upon the Escrowed Sum, which security interest and lien shall be prior
to all other security interests, liens or claims against the Escrowed Sum or
any part thereof. Each of the Undersigned warrant and agree with the
Depository that, unless otherwise expressly set forth in this Agreement,
there is no security interest in the Escrowed Sum or any part thereof; no
financing statement under the Uniform Commercial Code of any jurisdiction is
on file in any jurisdiction claiming a security interest in or describing,
whether specifically or generally, the Escrowed Sum or any part thereof; and
the Depository shall have no responsibility at any time to ascertain whether
or not any security interest exists in the Escrowed Sum or any part thereof
or to file any financing statement under the Uniform Commercial Code of any
jurisdiction with respect to the Escrowed Sum or any part thereof.
(d) The Depository is authorized by the Undersigned to withhold from
the Escrowed Sum, prior to distribution thereof and prior to termination of
this Agreement, all unpaid fees and expenses to which the Depository is
entitled hereunder. In addition, in the event any such fees and expenses are
not paid to the Depository on or prior to the date
A-5
such amounts are due, the Depository is hereby authorized and directed to
pay such amounts owed to it from the Escrowed Sum.
(e) In the event fees and expenses of the Depository are to be paid
pursuant to paragraph 22 hereof, it is understood and agreed by the
Undersigned that such fees and expenses are in addition to those described
above and that such fees and expenses shall be subject to periodic review and
modification by the Depository as determined by the Depository in its sole
discretion.
13. EFFECTIVE DATE. The effective date of this Agreement shall be the
date on which it is accepted by the Depository unless otherwise provided in
paragraph 22.
14. TERMINATION AND RESIGNATION. Unless sooner terminated as
hereinafter provided, this Agreement shall terminate without action of any
party when all of the terms hereof shall have been fully performed. Either
the Depository or the Undersigned may terminate this Agreement upon thirty
(30) days written notice (i) signed by the Depository and delivered to each
of the Undersigned or (ii) signed by each of the Undersigned and delivered to
the Depository. Upon termination of this Agreement, the Depository shall
deliver the Escrowed Sum in accordance with the written instructions
delivered by the Undersigned pursuant to paragraph 3(a) hereof. All fees and
expenses owed to the Depository hereunder shall be paid in full prior to such
delivery of the Escrowed Sum, and the Depository is hereby authorized and
directed by the Undersigned to withhold release or distribution of the
Escrowed Sum until such time as the Depository has received payment in full
of such fees and expenses. The Depository is authorized and directed to
deduct such fees and expenses from the Escrowed Sum prior to release or
distribution thereof.
15. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, and such counterparts shall constitute
and be one and the same instrument.
16. ASSIGNMENT OF INTERESTS. None of the Undersigned shall assign or
attempt to assign or transfer his or its interest hereunder or any part
thereof. Any such assignment or attempted assignment by any one or more of
the Undersigned shall be in direct conflict with this Agreement and the
Depository shall not be bound thereby.
17. AMENDMENTS. This Agreement cannot be amended or modified except by
another agreement in writing signed by all the parties hereto or by their
respective successors in interest.
18. HEADINGS. The paragraph headings contained herein are for
convenience of reference only and are not intended to define, limit or
describe the scope or intent of any provision of this agreement.
19. GOVERNING LAW. This Agreement shall be deemed to have been made
and shall be construed and interpreted in accordance with the laws of the
State of Texas.
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20. INVESTMENT OF ESCROWED SUM; WITHHOLDING.
(a) The Depository shall invest cash balances each day in such money
market or other short-term investment funds as shall be specified in writing
by an Authorized Representative on Exhibit "B" [Disclosure and Direction]
attached hereto. Such money market or short-term investment funds may
include, but shall not be limited to, any open-end or closed-end management
investment trust or investment company registered under the Investment
Company Act of 1940, as amended, for which the Depository or one of its
affiliates acts as investment advisor, custodian, transfer agent, registrar,
sponsor, distributor, manager or otherwise, and any fees paid to the
Depository or its affiliate by such fund shall be in addition to the fees and
expenses owed to the Depository under this Agreement.
(b) The Depository shall not be responsible or liable for determination
or payment of any taxes assessed against the Escrowed Sum or the income
therefrom nor for the preparation or filing of any tax returns other than
withholding required by statute or treaty. Each of the Undersigned agree to
provide the Depository any information necessary to perform any such required
withholding and the Depository shall be entitled to rely on such information.
The Depository will establish the account holding the Escrowed Sum under the
TIN of _____________; if Depository is responsible for tax reporting as set
forth in paragraph 22, it will be rendered under the aforementioned TIN. A
W-9 certifying to the party's withholding status in the form set forth in
Exhibit "C" attached hereto will be completed at closing.
(c) The Depository may make any and all investments through its own
bond or investment department. The Depository shall not be held liable or
responsible for the quality or diversity of the assets constituting the
Escrowed Sum or for any loss or depreciation in the value of such assets or
any loss resulting from any investment made by the Depository in accordance
with the terms of this Agreement. If the Depository is required to sell or
otherwise redeem or liquidate any Escrowed Sum prior to its maturity, the
Undersigned agree that the Depository shall not be personally liable for any
loss to the Escrowed Sum (including either principal or income) or other
costs incurred as a result of any such early redemption or liquidation.
21. INDEMNIFICATION AND HOLD HARMLESS. The Undersigned hereby agree to
indemnify and hold the Depository and its directors, employees, officers,
agents, successors and assigns harmless from and against any and all losses,
claims, damages, liabilities and expenses, including without limitation,
reasonable costs of investigation and counsel fees and expenses which may be
imposed on the Depository or incurred by it in connection with its acceptance
of this appointment as the Depository hereunder or the performance of its
duties hereunder. Such indemnity includes, without limitation, all losses,
damages, liabilities and expenses (including counsel fees and expenses)
incurred in connection with any litigation (whether at the trial or appellate
levels) arising from this Escrow Agreement or involving the subject matter
hereof. The indemnification provisions contained in this paragraph 21 are in
addition to any other rights any of the indemnified parties may have by law
or otherwise and shall survive the termination of this Agreement or the
resignations or removal of the Depository.
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22. ADDITIONAL TERMS.
See Exhibit D attached hereto and incorporated herein by reference.
A-8
IN WITNESS WHEREOF, the parties have caused this Indemnification Escrow
Agreement to be executed this ___________ day of _______, 199_.
BEST PAGE, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
------------------------------
Xxxxxxxxx Xxxxxxx
------------------------------
Xxxx XxXxxxxx
CONTACT COMMUNICATION, INC.
By:
---------------------------
Name:
-------------------------
Title:
------------------------
The Depository hereby acknowledges receipt of the Escrowed Sum described
in Schedule A hereof and hereby accepts the same as Depository hereunder,
subject to the terms and conditions set forth above, this _____ day of
____________, 1995.
NationsBank of Texas, National Association,
DEPOSITORY
BY:
------------------------------------------
------------------------------------------
TITLE:
---------------------------------------
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ATTACHMENTS:
Schedule A - Authorized Representatives
Exhibit A - Schedule of Fees
Exhibit B - Disclosure and Direction (Investments)
Exhibit C - Withholding Form
Exhibit D - Additional Terms
A-10
SCHEDULE A
AUTHORIZED REPRESENTATIVES
The following person(s) are designated as Authorized Representative as that
term is defined in the Agreement and specimen signatures are shown:
------------------------------------ --------------------------------------
Typed Name Signature
------------------------------------ --------------------------------------
Typed Name Signature
------------------------------------ --------------------------------------
Typed Name Signature
EXHIBIT A
SCHEDULE OF FEES
Out of pocket expenses such as, but not limited to, postage, courier,
insurance, long distance telephone, stationery, travel, legal or accounting,
etc., will be billed at cost.
The initial and administration fee are due at closing.
These fees do not include extraordinary services which will be priced
according to time and scope of duties.
It is acknowledged that the Schedule of Fees shown above are acceptable for
the services mutually agreed upon and the Undersigned authorize the
Depository to perform said services.
----------------------------------------------------
Acknowledged and Agreed
By:
----------------------------------------------
By:
----------------------------------------------
By:
----------------------------------------------
Date:
----------------------------------------------
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EXHIBIT D
22. Additional Terms
a. CLAIMS AGAINST AND PAYMENTS FROM ESCROW.
(i) Claims against the Escrowed Sum may be made by Purchaser, on its
own behalf or on behalf of any other Purchaser Indemnified Party (as defined
in the Apple Agreement and the Indemnification Agreement), for
indemnification of any Purchaser Indemnified Cost (as defined in the Apple
Agreement and the Indemnification Agreement). Claims under the Apple
Agreement shall be limited to the amount of $404,000 and claims under the
Indemnification Agreement, shall be limited to the amount of $96,000.
(ii) Purchaser shall promptly notify the applicable Seller and the
Depository in writing of any sums which Purchaser claims are subject to
indemnification. Failure of Purchaser to exercise promptness in such
notification shall not amount to a waiver of such claim unless the resulting
delay materially prejudices the position of the applicable Seller with
respect to such claim. Such notice shall consist of a description of the
claim and specify each Purchaser Indemnified Party and the amount (which may
be estimated) of the claim in United States dollars.
(iii) The applicable Seller may contest the claims specified in
paragraph 22(a)(ii) (or any portion thereof) by giving the Depository and
Purchaser written notice of such contest within ten days after receipt by
such Seller of a notice from Purchaser under paragraph 22(a)(ii), which
notice of contest shall include a statement of the grounds of such contest
and shall state the amount of any such claim by Purchaser that the Seller
does not dispute.
(iv) Payment of any claim for indemnification (or portion thereof) to
which the Escrowed Sum is subject shall become due and payable as follows:
(x) If, at 5:00 p.m., Dallas, Texas time on the tenth business day
after receipt by any Seller and the Depository of a notice of claim for
indemnification pursuant to paragraph 22(a)(ii) above, the Depository has not
received written notice from such Seller that the Seller contests the claim
(or portion thereof) pursuant to Paragraph 22(a)(iii) above, the claim (or
the uncontested portion thereof) shall be promptly paid by the Depository to
Purchaser as promptly as practicable;
(y) If the Seller contests the claim (or portion thereof) pursuant
to paragraph 22(a)(iii) and the claim (or portion thereof) is settled by
written agreement of such Seller and Purchaser, the amount provided in such
written agreement shall, upon receipt by the Depository of a copy of such
written agreement, be promptly paid by the Depository pursuant to the terms
of such written agreement; and
(z) If the Seller contests the claim (or portion thereof) pursuant
to paragraph 22(a)(iii) hereof and a final judgment or decree is entered by a
court of
D-1
competent jurisdiction with respect to such claim (or portion thereof) from
which no appeal has been taken within the time allowed or from which no
appeal can be taken, such amount of the final judgment or decree shall be
promptly paid by the Depository pursuant to the terms of such final judgment
or decree.
b. RELEASE OF FUNDS. On each of the 91st, 182nd, and 273rd days
following the Closing, the Depository shall release to the Sellers from the
Escrowed Sum then held in escrow the lesser of (a) $125,000 and (b) the
amount then held in escrow and not then subject to claims by Purchaser. On
the 360th day following the Closing, the Depository shall release to the
Sellers such remaining portion of the Escrowed Sum then held in escrow and
not then subject to claims by Purchaser. Any portion of the Escrowed Sum
that is subject to claims by Purchaser on the 360th day following the Closing
(the "Release Date") shall be distributed in accordance with the provisions
of paragraph 22(a)(iv) hereof.
c. NOTICES. All notices, consents, or other communications hereunder
shall be in writing and shall be sufficient if delivered personally, by a
nationally recognized courier service, or sent by registered or certified
mail, or via express mail service, postage prepaid, addressed as follows, or
to such other address as any party shall designate in a subsequent notice:
To Buyer: Contact Communications, Inc.
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Xxxx X. Xxxxx
(000) 000-0000
Fax No. (000) 000-0000
With a copy to: ProNet Inc.
0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxx
Fax No. (000) 000-0000
To Sellers: Xxxxxxxxx Xxxxxxx
0000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
With a copy to: Xxxxxxx Xxxxxxxxxx, Esquire
000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Fax No. (000) 000-0000
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To Depository: NationsBank of Texas, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Corporate Trust/Xxxxxx Xxxxxxx
Fax No. (000) 000-0000
Any such notice shall be deemed sent when received at the address or fax
number so designated.
d. ALLOCATION OF DEPOSITORY'S FEES. The Undersigned, as among
themselves, agree that all fees and expenses charged by or payable to the
Depository shall be borne 50% by Purchaser and 50% by the Sellers.
e. ALLOCATION OF INDEMNIFICATION LIABILITIES. The Undersigned, as
among themselves, agree that, in the event of any dispute resulting in
litigation over entitlement to or distribution of the Escrowed Sum, the
non-prevailing party(ies) shall pay 100% of any and all losses, claims,
damages, liabilities and expenses of the Depository for which the Undersigned
may be jointly and severally liable under the terms of this Agreement.
D-3
EXHIBIT B
FORM OF
OPINION OF COUNSEL TO APPLE AND THE SELLERS
1. Apple is a corporation duly incorporated, validly existing, and in
good standing under the laws of the State of Illinois.
2. Apple has full corporate power and corporate authority to execute
and deliver the Purchase Agreement and to perform the obligations
contemplated thereby. The execution and delivery by Apple of the Purchase
Agreement has been duly authorized by all necessary corporate action on the
part of Apple. The Purchase Agreement has been duly executed and delivered
by Apple and constitutes the legal, valid, and binding obligation of Apple
enforceable in accordance with its terms.
3. The Sellers have duly executed and delivered the Purchase
Agreement, their respective Noncompetition Agreement and the Registration
Rights Agreement (collectively, the "Seller Documents"). Each of the Seller
Documents constitutes the legal, valid, and binding obligation of the
applicable Seller enforceable in accordance with its terms.
4. Neither the execution and delivery by Apple of the Purchase
Agreement, nor the performance by Apple of its obligations thereunder
violates or conflicts with, results in a breach of, or constitutes a default
under Apple's Certificate of Incorporation or Bylaws, any law, any judgment,
decree, or order of any court or any other agency of government known to this
firm that is applicable to Apple or Apple's property, or any material
agreement known to this firm to which Apple is a party or by which Apple's
property is bound.
5. Neither the execution and delivery by either Seller of any of the
Seller Documents, nor the performance by either Seller of his or her
respective obligations thereunder, violates or conflicts with, results in a
breach of, or constitutes a default under any law, any judgment, decree, or
order of any court or any other agency of government known to this firm that
is applicable to either Seller or Apple or his, her, or its property, or any
material agreement known to this firm to which Sellers or Apple is a party,
or by which his, her, or its properties is bound.
6. No approvals or authorizations by, or filings or qualifications
with, any state, federal, or local agency, authority, or body are required in
connection with the execution, delivery, and performance of the Purchase
Agreement or any other agreements or documents executed and delivered
pursuant thereto by Apple and/or either Seller, except such as have been duly
obtained or made.
7. To our knowledge, there is no action, suit, investigation, or
proceeding that is pending or threatened against or affecting Apple or either
Seller in any court or before any governmental authority, arbitration board,
or tribunal that (a) involves any of the
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transactions contemplated by the Purchase Agreement or (b) if decided
adversely to Apple or such Sellers, would involve the possibility of
materially and adversely affecting business, operations, assets, or prospects
of Apple.
8. To our knowledge, there are no pending or threatened condemnation
or similar proceedings or assessments affecting Apple or any assets thereof
and there are no such proceedings or assessments contemplated by any
governmental authority.
9. To our knowledge, neither Apple nor either Seller has entered into
any agreement pursuant to which any other individual or entity has obtained
the right to acquire any or all of the Shares or the assets of Apple.
10. Upon the consummation by Sellers of the transactions contemplated
by the Purchase Agreement, the Purchaser shall have duly and validly acquired
all of the right, title, and interest in and to the Shares and the Shares
will have been conveyed by proper and enforceable instruments of conveyance,
and, to our knowledge after inquiry, all consents of third parties necessary
for such conveyance to be valid and enforceable by the Purchaser against
third parties will have been obtained.
11. To our knowledge after inquiry, Apple does not currently sponsor or
contribute to, or have any contract or other obligation to sponsor or
contribute to, any employee benefit plan subject to ERISA.
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EXHIBIT C
FORM OF
OPINION OF APPLE'S FCC COUNSEL
1. Apple and the Sellers have complied in all respects with, and are
not in violation in any respect of, the Communications Act of 1934, as
amended, and the rules, regulations, policies, precedents and orders
promulgated thereunder (collectively, the "Act"), by virtue of the licenses
and authorizations issued or granted to Apple by the Federal Communications
Commission (the "FCC"), as listed in SCHEDULE 3.11 of the Agreement (the
"Licenses"), except as listed therein.
2. The Licenses, which constitute all licenses, orders and other
authorizations from the FCC which are necessary for Apple's operation of the
System, were duly issued by the FCC to Apple and have not been sold,
conveyed, pledged, assigned or transferred to any other party. There are no
liens, charges, encumbrances or adverse claims with respect to the Licenses.
All of the Licenses are in full force and effect and their grant to Apple is
"final," I.E., no longer subject to administrative reconsideration or review
or to judicial review, whether on motion of the reviewing agency or
otherwise. No License is subject to any condition or requirement not
generally imposed by the FCC upon holders of authorizations in the same
service. The Licenses were properly and validly obtained by Apple in
compliance with the Act. No party has valid grounds to contest the
assignment of the Licenses as contemplated by the Agreement. No event has
occurred with respect to any of the Licenses which permits, or after notice
or lapse of time or both would permit, revocation or termination thereof or
would result in any impairment of the rights of the holder of any License or
the imposition of a forfeiture against Apple or the Sellers or any subsequent
holder with respect to their operation of the System. Apple and the Sellers
have received no pending notice of violation with respect to any of the
Licenses. All Licenses are renewable by their terms, and the Licenses can be
renewed without the need to pay any amounts other than routine FCC fees. No
state regulatory agencies exercise any jurisdiction over the operation of the
System.
3. The execution, delivery and performance of the Agreement by the
Purchaser, Apple and the Sellers will not violate, conflict with or result in
the breach of any term, condition or provision of, or require the consent of
any other party to, any judgment, order, writ, injunction, decree or award of
any court, arbitrator or governmental or regulatory official, body or
authority which is applicable to Apple or the Sellers or any of their assets
by virtue of the Licenses. All authorizations, approvals and consents of,
and registrations and filings with and notices to, the FCC required in
connection with the execution, delivery and performance of the Agreement
(including the assignment of the Licenses from Seller to Purchaser) by Apple
and the Sellers by virtue of the Licenses are in full force and effect and
their grant is "final," other than certain post-closing informational filings
that may be required by the Act (I.E., written notification to the FCC that
the assignment has, in fact, been completed).
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4. Apple has obtained all necessary clearances from the Federal
Aviation Administration ("FAA") for the construction of all radio towers
associated with the System. Apple and the Sellers have complied in all
respects with, and are not in violation in any respect of, all rules,
regulations, policies, precedents or orders of the FAA with respect to such
towers.
5. No judgments, decrees or orders have been issued by the FCC against
Apple or the Sellers in connection with the Licenses or the System. No
action, proceeding, inquiry, investigation, notice of apparent liability,
order of forfeiture, show cause order, license revocation proceeding, formal
complaint or informal complaint is currently pending or threatened by or
before the FCC regarding the Licenses or the System, or regarding Apple or
the Sellers, other than rulemaking proceedings of general applicability
pertaining to the paging industry. All reports and other filings required
under the Act with respect to the Licenses, the System, or Apple have been
made in a timely manner.
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EXHIBIT D
FORM OF
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is entered into as of
__________, 1995, between Contact Communications Inc., a Delaware corporation
(the "Company"), and ______________________ (the "Seller").
W I T N E S S E T H
WHEREAS, concurrently herewith, the Seller is selling, transferring, and
conveying all of the capital stock of Apple Communication, Inc., an Illinois
corporation ("Apple") to the Company, pursuant to that certain Stock Purchase
Agreement (the "Purchase Agreement") dated as of ______________________, 1995,
by and among the Company, Apple, the Seller, and _________________________.
WHEREAS, the Seller has been affiliated with Apple for a number of years
and, as a principal shareholder and officer of Apple, possesses valuable
knowledge about the business and operations of Apple; and
WHEREAS, the Company has requested that the Seller enter into this
Agreement as an inducement to the Company to enter into and consummate the
transactions contemplated by the Purchase Agreement;
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises herein contained and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto
agree as follows:
1. CONSIDERATION. The Seller has entered into this Agreement and made
the covenants hereinafter set forth in order to induce the Company to
consummate the transactions contemplated by the Purchase Agreement. As
additional consideration for the Seller's covenants contained herein, the
Company, concurrently with the execution of this Agreement is paying the
Seller $_____________ in the form of a certified bank check or wire transfer.
2. CONFIDENTIAL INFORMATION. The Seller acknowledges that the
information and data obtained or possessed by him concerning the business
affairs of Apple will be the property of the Company and not the Seller.
Therefore, the Seller agrees that he will not disclose to any person or use for
his own account any of such information or data unless and to the extent that
such information or data become generally known to and available
_____________________
* $1,125,000 for Xxxxxxxxx Xxxxxxx'x covenant not to compete.
$375,000 for Xxxx XxXxxxxx'x covenant not to compete.
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for use by the public otherwise than as a result of the Sellers's act or
omission to act. The Seller agrees to deliver to the Company, at any time
the Company may request, all memoranda, notes, plans, records, reports, and
other documents (and copies thereof) relating to the business and operations
of Apple which he may then possess or have under his control.
3. NONCOMPETITION. The Seller agrees that he shall not, until 11:59
p.m. on the fifth anniversary of the date hereof:
a. directly or indirectly own, engage in, manage, operate, join,
control, or participate in the ownership, management, operation,
or control of, or be connected as a stockholder, director,
officer, employee, agent, partner, joint venturer, member,
beneficiary, or otherwise with, any corporation, limited
liability company, partnership, sole proprietorship, association,
business trust, or other organization, entity or individual which
in any way competes with the Company in the sale or leasing of
pagers or paging services in the Chicago Area (as hereinafter
defined); PROVIDED, HOWEVER, that the Seller may own, directly or
indirectly, securities of any entity traded on any national
securities exchange or listed on the National Association of
Securities Dealers Automated Quotation System if the Seller does
not, directly or indirectly, own 3% or more of any class of
equity securities, or securities convertible into or exercisable
or exchangeable for 3% or more of any class of equity securities,
of such entity;
b. aid, abet, or otherwise assist any individual, business or other
organization or entity in canvassing, soliciting, or accepting
any contracts for the sale or lease of pagers or paging services
in the Chicago Area;
c. directly or indirectly request or advise any present or future
customers of Apple or the Company to cancel any contracts with
Apple or the Company or curtail their dealings with Apple or the
Company;
d. directly or indirectly request or advise any present or future
service provider or financial resource of Apple or the Company to
withdraw, curtail, or cancel the furnishing of such service or
resource to Apple or the Company;
e. directly or indirectly disclose or communicate to any other
person, firm, or corporation:
(1) the names of past, present, or future customers of Apple or
the Company; or
(2) any names of past, present, or future employees or other
knowledge of or relating to Apple or the Company; or
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f. directly or indirectly induce or attempt to influence any
employee of Apple or the Company to terminate his or her
employment, provided that this covenant shall not apply to
members of the Seller's immediate family.
Notwithstanding the foregoing, it is acknowledged and agreed by the parties
hereto that the provision by the Seller of radio paging services, solely as a
reseller of such services and solely pursuant to an agreement to be entered
into between the Seller (or the Seller's designee) and the Company, shall not
constitute a breach of this Agreement. As used herein, the "Chicago Area"
means that area described in the map attached hereto as Schedule 1.
4. AMENDMENTS. This Agreement may be amended or modified from time to
time, but only by a written instrument executed by both parties hereto.
5. NOTICES. Any notices required or permitted hereunder shall be in
writing and shall be deemed given (a) when personally delivered, (b) when
confirmed if delivered by telefacsimile or similar device, or (c) when sent
by registered or certified mail, return receipt requested, addressed to the
other party at its or his address set forth below its or his signature to
this Agreement, or at such other address as it or he may specify in writing
in accordance with this Section 5.
6. ENTIRE AGREEMENT. This Agreement contains the entire understanding
of the parties hereto respecting the subject matter hereof and supersedes all
prior discussions and understandings.
7. ASSIGNMENT; PARTIES BOUND. The Company may assign its rights and
obligations hereunder to any party. The Seller may not assign any of his
obligations hereunder. Any assignment in violation of the foregoing shall be
null and void. Subject to the foregoing, this Agreement shall be binding
upon the parties hereto and shall inure to the benefit of the parties hereto
and their respective heirs, executors, administrators, legal representatives,
successors, and permitted assigns.
8. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Illinois (regardless of the laws that might otherwise govern under
applicable Illinois principles of conflicts of law) as to all matters,
including but not limited to, matters of validity, construction, effect,
performance, and remedies.
9. NON-WAIVER OF BREACH. A waiver by any party hereto of a particular
breach or default in connection with any provision of this Agreement shall
not be deemed a waiver of any subsequent default or breach of the same or any
other provision of this Agreement.
10. INVALID PROVISION. If any provision of this Agreement is held to
be illegal, invalid, or unenforceable under present or future laws, such
provision shall be severable, and this Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
comprised a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected
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by such illegal, invalid, or unenforceable provision or by its severance
herefrom. 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 terms to such illegal, invalid, or unenforceable
provision as may be possible and be legal, valid, and enforceable.
11. HEADINGS. The headings in this Agreement are for purposes of
reference only and shall not be considered in construing this Agreement.
12. ATTORNEYS' FEES. If either party hereto brings any action, at law
or in equity, to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to recover from the other party hereto
reasonable attorneys' fees in addition to any other relief to which such
party may be entitled.
13. ENFORCEMENT OF COVENANTS. The Seller agrees that a violation on
his part of any covenant contained herein shall cause irreparable damage to
the Company and, consequently, the Seller further agrees that the Company
shall be entitled, as a matter of right, to an injunction restraining any
further violation of such covenant by the Seller. Such right to an
injunction shall be cumulative and in addition to all other remedies the
Company may have, including, but not limited to, recovery of damages.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
CONTACT COMMUNICATIONS INC.
By:
------------------------------------------
Name:
------------------------------------------
Title:
------------------------------------------
Address: 0000 XXX Xxxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx
Xxxx X. Xxxxx
Fax No: (000) 000-0000
------------------------------------------------
------------------------------------
Address:
---------------------------------------
---------------------------------------
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D-4
EXHIBIT E
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is entered into as
of _____________, 1995, by and among ProNet Inc., a Delaware corporation (the
"Company"), Xxxxxxxxx Xxxxxxx and Xxxx XxXxxxxx (collectively, the
"Shareholders").
RECITALS:
A. Contact Communications Inc., a wholly owned subsidiary of the
Company ("Contact"), Apple Communication, Inc., an Illinois corporation
("Apple"), and the Shareholders have entered into that certain Stock Purchase
Agreement dated as of ____________________, 1995 (the "Purchase Agreement"),
pursuant to which Contact is to acquire all of the outstanding capital stock
of Apple (the "Shares").
B. Pursuant to the terms of the Purchase Agreement, Contact may elect
to pay a portion of the purchase price for the Shares in shares of the
Company's common stock, par value $.01 per share ("Common Stock").
C. Pursuant to the terms of the Purchase Agreement, the Company has
agreed to register the shares of Common Stock received by the Shareholders
thereunder pursuant to the terms and conditions set forth herein.
AGREEMENTS:
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. As used herein, the following terms shall have the
meanings indicated.
"COMMISSION" means the Securities and Exchange Commission.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"REGISTRABLE SECURITIES" means the shares of Common Stock received
by the Shareholders pursuant to the Purchase Agreement and held of record by
either Shareholder. Any Registrable Security will cease to be a Registrable
Security when a registration statement under the Securities Act covering such
Registrable Security has been declared effective by the Commission or when
such Registrable Security is no longer held of record by such Shareholder.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
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2. REGISTRATION STATEMENT. On or before 14 days after the date hereof,
the Company shall file a "shelf" registration statement on an appropriate form
pursuant to Rule 415 under the Securities Act, or any similar rule that may be
adopted by the Commission (the "Registration Statement"), with respect to the
sale of all of the Registrable Securities and any other shares of Common Stock
or other securities of the Company that the Company, in its sole discretion,
elects to include therein. The Company shall use all commercially reasonable
efforts to have the Registration Statement declared effective by the Commission
under the Securities Act concurrently with the delivery of any such shares of
Common Stock and to keep the Registration Statement effective for a period of 15
months following the date on which the Registration Statement is declared
effective. The Company further agrees, if necessary, to supplement or make
amendments to the Registration Statement, if required by the registration form
used by the Company for the Registration Statement or by the instructions
applicable to such registration form or by the Securities Act or the rules and
regulations thereunder.
3. REGISTRATION PROCEDURES.
Following the issuance of Common Stock by the Company to the Shareholders
pursuant to the terms of the Purchase Agreement, the Company will as
expeditiously as reasonably possible:
(a) furnish to the Shareholders, prior to filing the Registration
Statement, if requested in writing, copies of the Registration Statement as
proposed to be filed, and thereafter furnish to Shareholders such number of
copies of the Registration Statement, each amendment and supplement thereto (in
each case including all exhibits thereto), the prospectus included in the
Registration Statement (including each preliminary prospectus) and such other
documents as Shareholders may reasonably request in writing in order to
facilitate the disposition of the Registrable Securities owned by the
Shareholders;
(b) use all commercially reasonable efforts to register or qualify
the Registrable Securities under such other securities or blue sky laws of such
jurisdictions as the Shareholders may reasonably request and do any and all
other acts and things which may be reasonably necessary to enable the
Shareholders to consummate the disposition in such jurisdictions of the
Registrable Securities; PROVIDED that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection, (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of process
in any such jurisdiction;
(c) notify the Shareholders, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the occurrence
of an event requiring the preparation of a supplement or amendment to such
prospectus so that, as thereafter delivered to the purchasers of the Registrable
Securities, such prospectus will not contain an untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and promptly make
available to the Shareholders any such supplement or amendment; and
E-2
(d) make available for inspection by either Shareholder and any
attorney, accountant or other professional retained thereby (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents
and properties of the Company (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information reasonably requested by any such Inspectors in connection
with the Registration Statement. Records which the Company determines, in good
faith, to be confidential and which it notifies the Inspectors are confidential
shall not be disclosed by the Inspectors unless (i) in the judgment of counsel
to the Company the disclosure of such Records is necessary to avoid or correct a
misstatement or omission in the Registration Statement or (ii) the release of
such Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction. Each Shareholder agrees that information obtained by it
as a result of such inspections shall be deemed confidential and shall not be
used by it as the basis for any market transactions in the securities of the
Company unless and until such is made generally available to the public. Each
Shareholder further agrees that it will, upon learning that disclosure of such
Records is sought in a court of competent jurisdiction, give notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of the Records deemed confidential.
The Company may require the Shareholders to promptly furnish in writing to
the Company such information regarding the distribution of the Registrable
Securities as it may from time to time reasonably request and such other
information as may be legally required in connection with such registration.
Each Shareholder agrees that, upon receipt of any notice from the Company
of the happening of any event of the kind described in subsection 3(c) hereof,
Shareholders will immediately discontinue disposition of Registrable Securities
pursuant to the Registration Statement until Shareholders' receipt of the copies
of the supplemented or amended prospectus contemplated by subsection 3(c)
hereof, and, if so directed by the Company, the Shareholders will deliver to the
Company all copies, other than permanent file copies then in the Shareholders'
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. If the Company shall give such notice,
the Company shall extend the period during which the Registration Statement
shall be maintained effective by the number of days during the period from and
including the date of the giving of notice pursuant to subsection 3(c) hereof to
the date when the Company shall make available to the Shareholders a prospectus
supplemented or amended to conform with the requirements of subsection 3(c)
hereof.
4. REGISTRATION EXPENSES.
In connection with the Registration Statement required to be filed
hereunder, the Company shall pay the following registration expenses: (a) all
registration and filing fees; (b) the fees and expenses of the Company's
compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities); (c) printing expenses; (d) the reasonable fees and
disbursements of counsel for the Company and the customary fees and expenses for
independent certified public accountants retained by the Company; and (e) the
reasonable
E-3
fees and expenses of any special experts retained by the Company in
connection with such registration. The Company shall not have any obligation
to pay any legal fees of the Shareholders, any underwriting fees, discounts
or commissions attributable to the sale of Registrable Securities or any
out-of-pocket expenses of the Shareholders (or their agents).
5. INDEMNIFICATION; CONTRIBUTION.
(a) INDEMNIFICATION BY THE COMPANY. The Company agrees to indemnify
and hold harmless the Shareholders from and against any and all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in the Registration Statement or prospectus contained
therein or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses arise out of, or are based upon, any such
untrue statement or omission or allegation thereof based upon information
furnished in writing to the Company by the Shareholders or on the Shareholders'
behalf expressly for use therein and; PROVIDED, FURTHER, that with respect to
any untrue statement or omission or alleged untrue statement or omission made in
any preliminary prospectus, the indemnity agreement contained in this subsection
shall not apply to the extent that any such loss, claim, damage, liability or
expense results from the fact that a current copy of the prospectus was not sent
or given to the person asserting any such loss, claim, damage, liability or
expense at or prior to the written confirmation of the sale of the Registrable
Securities to such person if it is determined that it was the responsibility of
the Shareholders to provide such person with a current copy of the prospectus
and such current copy of the prospectus would have cured the defect giving rise
to such loss, claim, damage, liability or expense.
(b) INDEMNIFICATION BY SHAREHOLDERS. Each Shareholder agrees to
indemnify and hold harmless, on a joint and several basis, the Company, its
directors and officers and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the Company to
the Shareholders, but only with respect to information furnished in writing by
either Shareholder or on either Shareholder's behalf expressly for use in the
Registration Statement or prospectus relating to the Registrable Securities, any
amendment or supplement thereto or any preliminary prospectus. In case any
action or proceeding shall be brought against the Company or its directors or
officers, or any such controlling person, in respect of which indemnity may be
sought against the Shareholders, the Shareholders shall have the rights and
duties given to the Company, and the Company or its directors or officers or
such controlling person shall have the rights and duties given to the
Shareholders, by the preceding subsection hereof.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any action or
proceeding (including any governmental investigation) shall be brought or
asserted against any person entitled to indemnification under subsections (a) or
(b) above (an "Indemnified Party") in respect of which indemnity may be sought
from any party who has agreed to provide such indemnification (an "Indemnifying
Party"), the Indemnifying Party shall assume the defense
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thereof, including the employment of counsel reasonably satisfactory to such
Indemnified Party, and shall assume the payment of all expenses. Such
Indemnified Party shall have the right to employ separate counsel in any such
action and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i)
the Indemnifying Party has agreed to pay such fees and expenses or (ii) the
named parties to any such action or proceeding (including any impleaded
parties) include both such Indemnified Party and the Indemnifying Party, and
such Indemnified Party shall have been advised by counsel that there is a
conflict of interest on the part of counsel employed by the Indemnifying
Party to represent such Indemnified Party (in which case, if such Indemnified
Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense of such action or
proceeding on behalf of such Indemnified Party; it being understood, however,
that the Indemnifying Party shall not, in connection with any one such action
or proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more
than one separate firm of attorneys (together with appropriate local counsel)
at any time for all such Indemnified Parties, which firm shall be designated
in writing by such Indemnified Parties). The Indemnifying Party shall not be
liable for any settlement of any such action or proceeding effected without
its written consent, but if settled with its written consent, or if there be
a final judgment for the plaintiff in any such action or proceeding, the
Indemnifying Party shall indemnify and hold harmless such Indemnified Parties
from and against any loss or liability (to the extent stated above) by reason
of such settlement or judgment.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 5 is unavailable to the Indemnified Parties in respect of any losses,
claims, damages, liabilities or judgments referred to herein, then each
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 judgments in the following
manner: as between the Company on the one hand and each Shareholder on the
other, in such proportion as is appropriate to reflect the relative fault of the
Company on the one hand and each Shareholder on the other in connection with the
statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company on the one hand and of the
Shareholder on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such party, and the party's relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
No person guilty of fraudulent misrepresentation (within the meaning of
subsection 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) SURVIVAL. The indemnity and contribution agreements contained in
this Section 5 shall remain operative and in full force and effect regardless of
(i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Indemnified Party or
E-5
by or on behalf of the Company and (iii) the consummation of the sale or
successive resale of the Registrable Securities.
6. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given other than as initially agreed upon in
writing by the Company and the Shareholders.
(b) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered first-
class mail, telex, telecopier or air courier guaranteeing overnight delivery:
(i) if to the Shareholders, at the most current address given by
each Shareholder to the Company, in accordance with the provisions of this
subsection, which addresses initially are _________________________________
and _____________________________________________________.
(ii) if to the Company, initially at 0000 XXX Xxxxxxx, Xxxxxx,
Xxxxx 00000, attention: Xxxxxx X. Xxxxxx; Xxxx X. Xxxxx, and thereafter at
such other address as may be designated from time to time by notice given
in accordance with the provisions of this Section.
(c) SUCCESSORS AND ASSIGNS. The Shareholders shall not assign any
rights or benefits under this Agreement without the prior written consent of the
Company. This Agreement shall inure to the benefit of and be binding upon the
permitted successors and assigns of the Company and the Shareholders.
(d) COUNTERPARTS. This Agreement may be executed in a number of
identical counterparts and it shall not be necessary for the Company and the
Shareholders to execute each of such counterparts, but when each has executed
and delivered one or more of such counterparts, the several parts, when taken
together, shall be deemed to constitute one and the same instrument, enforceable
against each in accordance with its terms. In making proof of this Agreement,
it shall not be necessary to produce or account for more than one such
counterpart executed by the party against whom enforcement of this Agreement is
sought.
(e) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(f) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OR CHOICE OF LAW.
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(g) SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, such provision shall be fully severable; this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of each such illegal,
invalid or unenforceable provision, there shall be added automatically as a part
of this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
(h) ENTIRE AGREEMENT. This Agreement is intended by the Company and
the Shareholders as a final expression of their agreement and is intended to be
a complete and exclusive statement of their agreement and understanding in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the Company and the Shareholders
with respect to such subject matter.
(i) THIRD PARTY BENEFICIARIES. Other than Indemnified Parties not a
party hereto, this Agreement is intended for the benefit of the Company and the
Shareholders and their respective successors and assigns and is not for the
benefit of, nor may any provision hereof be enforced by, any other person or
entity.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
PRONET INC.
By:
-----------------------------------
Name:
-----------------------------
Title:
-----------------------------
--------------------------------------
Xxxxxxxxx Xxxxxxx
--------------------------------------
Xxxx XxXxxxxx
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EXHIBIT F
FORM OF OPINION OF XXXXXX & XXXXXX L.L.P.
[Draft - Subject to Opinion Committee review]
__________________, 1995
Xx. Xxxxxxxxx Xxxxxxx
Xx. Xxxx XxXxxxxx
Best Page, Inc.
0000 X. Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
This firm has acted as counsel for Contact Communications Inc. ("Contact")
and ProNet Inc. ("ProNet"), each of which is a Delaware corporation, in
connection with the acquisition by Contact of (a) all of the outstanding capital
stock of Apple Communication, Inc., an Illinois corporation ("Apple"), pursuant
to that certain Stock Purchase Agreement dated as of October__, 1995, by and
among Apple, Xxxxxxxxx Xxxxxxx ("Xxxxxxx"), Xxxx Xxxxxxxx, and Contact (the
"Purchase Agreement")(the "Stock Acquisition"), and (b) certain paging assets of
Best Page, Inc., an Illinois corporation ("Best Page"), pursuant to that certain
Assignment and Xxxx of Sale of even date herewith, by and among Best Page,
Xxxxxxx, and Contact (the "Xxxx of Sale")(the "Asset Acquisition" and, together
with the Stock Acquisition, the "Acquisitions"). This opinion is being rendered
pursuant to Section 6.2(d) of the Purchase Agreement. Unless otherwise defined
herein, each term used herein with its initial letter capitalized that is
defined in the Purchase Agreement has the meaning given such term in the
Purchase Agreement.
In connection with the opinions rendered below, we have examined the
following documents:
(i) the Purchase Agreement;
(ii) the Xxxx of Sale;
(iii) the Indemnification Agreement;
(iv) the Noncompetition Agreements;
(v) the Registration Rights Agreement;
(vi) the Indemnification Escrow Agreement;
(vii) the Certificate of Incorporation and bylaws of ProNet and Contact
as in effect on the date hereof; and
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Xxxxxxxxx Xxxxxxx
Xxxx XxXxxxxx
Best Page, Inc.
Page 2
______________, 1995
(viii) resolutions of the Board of Directors of each of ProNet and
Contact adopted in connection with the Acquisition.
The documents described in paragraphs (i) through (vi) are herein collectively
referred to as the "Transaction Documents."
We have also made such legal and factual examinations and inquiries as
we have deemed advisable or necessary for the purpose of rendering this opinion.
We have, except as set forth below, examined originals or copies of documents,
corporate records, and other writings which we consider relevant for the purpose
of this opinion, including, but not limited to, certificates of public
officials. We have also discussed such matters as we have deemed relevant to
this opinion with the officers of Contact and ProNet.
In rendering this opinion, we have assumed:
(i) that each natural person signing any document reviewed by this
firm had the legal capacity to do so, both at the time of
execution and as of the date hereof, and each person signing any
document reviewed by this firm in a representative capacity
(other than on behalf of ProNet or Contact) had authority to sign
in such capacity, both at the time of execution and as of the
date hereof;
(ii) the genuineness of the signatures appearing on all documents;
(iii) the authenticity of all documents submitted to us as originals;
(iv) the conformity to authentic original documents of all documents
submitted to us as certified, conformed, or photostatic copies;
(v) the due authorization, execution, and delivery of all of the
Transaction Documents by the parties thereto other than ProNet or
Contact; and
(vi) the correctness and accuracy of all facts set forth in all
certificates, reports, and discussions identified in this
opinion.
Whenever a statement or opinion herein is qualified by "known to this
firm," "to the knowledge of this firm," or similar phrase, such phrase means
that, in the course of rendering the legal services described in the
introductory paragraph of this letter, no facts
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Xxxxxxxxx Xxxxxxx
Xxxx XxXxxxxx
Best Page, Inc.
Page 3
______________, 1995
or circumstances have come to the attention of those attorneys in this firm
who rendered such legal services that gave any of such attorneys reason to
believe that any such information is incorrect in any respect that would
affect the opinions of this firm expressed herein.
For purposes of this opinion, we are assuming that you have all
requisite power and authority, and have taken any and all necessary action, to
execute and deliver the Transaction Documents, and we are assuming that the
representations and warranties made by you in the Purchase Agreement are true
and correct.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions, and assumptions set forth herein, and having due
regard for such legal considerations as we deem relevant, we are of the opinion
that:
1. Contact and ProNet are each corporations validly existing and in good
standing under the laws of the State of Delaware.
2. Contact and ProNet each have full corporate power and corporate
authority to execute and deliver the applicable Transaction Documents and to
perform the obligations contemplated thereby. The execution, delivery, and
performance by Contact or ProNet, as the case may be, of the applicable
Transaction Documents have been duly authorized by all necessary corporate
action on the part of Contact or ProNet. Each of the Transaction Documents has
been duly executed and delivered by Contact or ProNet, as the case may be, and
constitutes the legal, valid, and binding obligation thereof.
3. Neither the execution and delivery by Contact or ProNet of, nor the
performance by Contact or ProNet of their respective obligations under, the
applicable Transaction Documents violates or conflicts with, results in a breach
of, or constitutes a default under such entity's Certificate of Incorporation or
bylaws, any law, or any judgment, decree, or order of any court or any other
agency of government known to this firm that is applicable to such entity or
such entity's property.
4. To the knowledge of this firm, other than (a) the approval or
authorization of the Acquisition by the Federal Communications Commission, the
Federal Aviation Administration and any similar state or local regulatory
agencies, commissions or other entities, (b) the filing of the Shelf
Registration with the Securities and Exchange Commission, the filing of any
required amendments thereto and the declaration of the effectiveness thereof as
and in the manner and for the purpose contemplated by the
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Xxxxxxxxx Xxxxxxx
Xxxx XxXxxxxx
Best Page, Inc.
Page 4
______________, 1995
Registration Rights Agreement, and (c) any approvals, authorizations,
filings, or qualifications related to the offering contemplated by the Shelf
Registration by or with such state securities or blue sky agencies,
commissions, or other entities as are required by the Registration Rights
Agreement, no approvals or authorizations by, or filings or qualifications
with, any state, federal, or local agency, authority, or body are required to
be obtained by either Contact or ProNet in connection with the execution and
delivery by, or the performance of their respective obligations under, the
Transaction Documents except such as have been duly obtained or made.
5. To the knowledge of this firm, there is no action, suit,
investigation, or proceeding that is pending or threatened against or affecting
Contact or ProNet in any court or before any governmental authority, arbitration
board, or tribunal that involves any of the transactions contemplated by the
Transaction Documents.
The foregoing opinions are limited by and subject to the following:
(a) The opinions expressed herein with respect to the validity, binding
nature, and enforceability of the Transaction Documents are subject to (i) laws
relating to bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer,
reorganization, rearrangement, liquidation, conservatorship, moratorium, and
other laws affecting the enforcement of creditors' rights or the collection of
debtors' obligations generally, (ii) principles of equity (regardless of whether
enforceability is considered in a proceeding in equity or at law), (iii)
standards of commercial reasonableness and good faith, (iv) public policy, and
(v) other applicable laws, regulations, and procedures, provided that any
limitations imposed by such other applicable laws, regulations, and procedures
will not, in the opinion of this firm, preclude the practical realization of the
benefits intended to be conferred by such agreements (though they may result in
delays thereof and we express no opinion as to the economic consequences, if
any, of such delays).
(b) We express no opinion with respect to (i) the enforceability of
provisions in the Transaction Documents relating to delay or omission of
enforcement of rights or remedies, or waivers of defenses, waivers of jury
trials, or waivers of benefits of appraisement, valuation, stay, extension,
redemption, or other nonwaivable benefits bestowed by operation of law, (ii) the
enforceability of the indemnification and contribution provisions set forth in
the Transaction Documents to the extent they purport to relate to liabilities
resulting from or based upon negligence or any violation of federal or state
securities or blue sky laws, (iii) the right of any person or entity to
institute or maintain any
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Xxxxxxxxx Xxxxxxx
Xxxx XxXxxxxx
Best Page, Inc.
Page 5
______________, 1995
action in any court or upon matters respecting the jurisdiction of any court,
or (iv) the enforceability of any severability provisions set forth in the
Transaction Documents.
(c) In rendering the opinions set forth in Paragraph 1 above with respect
to the valid corporate existence and good standing of Contact and ProNet, we
have relied solely on the certificates of authorities in the State of Delaware
as of a date we deem sufficiently recent.
(d) In rendering the opinions set forth in Paragraph 3 above with respect
to conflicts of the Transaction Documents with any laws, we express no opinion
with respect to the Communications Act of 1934, as amended, and the rules and
regulations promulgated thereunder, the Federal Aviation Act of 1958, as
amended, and the rules and regulations promulgated thereunder, or the statutes,
ordinances, rules, or regulations of any state or local regulatory agencies,
commissions, or other entities having jurisdiction over the paging operations of
Apple, Best Page, Contact, or ProNet.
(e) In rendering the portions of the foregoing opinions that involve a
concept of materiality with respect to factual matters, we have relied
exclusively on the officers of Contact and ProNet in determining materiality.
(f) We are members of the Bar of the State of Texas only. The opinions
above are limited to the laws of the United States of America and the laws of
the State of Texas. We note that the Transaction Documents provide that they
are to be governed by the laws of states other than the State of Texas. While
we express no opinion with respect to the laws of such other states, we have
assumed that the internal laws of such other states are the same as the internal
laws of the State of Texas. We have made no investigation to confirm whether
such assumption is correct.
We express no opinion as to any matter other than as expressly set forth
above, and no opinion on any other matter may be inferred herefrom. This
opinion is given as of the date hereof, and we undertake no, and hereby disclaim
any, obligation to advise you of any change in any matter set forth herein.
This opinion is for the sole use and benefit of the
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Xxxxxxxxx Xxxxxxx
Xxxx XxXxxxxx
Best Page, Inc.
Page 6
______________, 1995
Seller and the Shareholders, and no other person may be furnished a copy of
such opinion or may rely on such opinion without our prior written consent.
Very truly yours,
XXXXXX & XXXXXX L.L.P.
F-6
EXHIBIT G
ASSIGNMENT AND XXXX OF SALE
STATE OF TEXAS )
) KNOW ALL MEN BY THESE PRESENTS:
COUNTY OF DALLAS )
THAT Best Page, Inc., an Illinois corporation ("Grantor"), in
consideration of the payment by Contact Communications Inc., a Delaware
corporation ("Grantee"), of $2,500,000.00 (the "Purchase Price"), by wire
transfer or certified bank check, the receipt and sufficiency of which are
hereby acknowledged, does hereby sell, convey, transfer, assign, and deliver
unto Grantee all of Grantor's rights, titles, and interests in and to all of
the assets, described on SCHEDULE 1 attached hereto (collectively, the
"Transferred Assets").
TO HAVE AND TO HOLD the Transferred Assets unto Grantee and its
successors and assigns forever, and Grantor does hereby bind itself and its
successors to warrant and forever defend the title to the Transferred Assets
unto Grantee, its successors, and assigns, against the claims and demands of
all persons. The Grantor hereby further warrants to Grantee that it is
conveying to Grantee good and indefeasible title to the Transferred Assets,
free and clear of all liens, mortgages, security interests, charges, or
encumbrances of any kind or character.
Grantor covenants and agrees, for the benefit of Grantee, its
successors, and assigns, without further consideration, and whenever and as
often as required so to do by Grantee, its successors, and assigns, to
execute and deliver to Grantee such other instruments of conveyance,
transfer, and assignment and take such other action as Grantee may require
more fully and effectively to transfer, assign, and convey to and vest in
Grantee and its successors and assigns, and to put Grantee, its successors,
and assigns in actual possession and operating control of, the Transferred
Assets.
Grantor has complied and is in compliance with the terms and conditions
of all federal, state, county, and local governmental licenses,
authorizations, certificates, permits, and orders listed on SCHEDULE 1 hereto
(collectively, the "Licenses"), and no violation of any such Licenses or the
laws or rules governing the issuance or continued validity thereof, has
occurred. All of the Licenses are in full force and effect and their grant
to Grantee is "final," I.E., no longer subject to administrative
reconsideration or review or to judicial review, whether on motion of the
reviewing agency or otherwise. No License is subject to any condition or
requirement not generally imposed by the Federal Communications Commission
(the "FCC") upon holders of authorizations in the same service. The Licenses
were properly and validly obtained by Grantor in compliance with the Act. To
the best knowledge of the Grantor, no party has valid grounds to contest the
assignment of the Licenses as contemplated hereby. To the best knowledge of
the Grantor, no event has
G-1
occurred with respect to any of the Licenses which permits, or after notice
or lapse of time or both would permit, revocation or termination thereof or
would result in any impairment of the rights of the holder of any License or
the imposition of a forfeiture against Grantor, Grantee, or any subsequent
holder with respect to their operation of the System. All Licenses are
renewable by their terms, and the Licenses can be renewed without the need to
pay any amounts other than routine FCC fees.
Nothing in this Xxxx of Sale and Assignment, express or implied, is
intended or shall be construed to confer upon, or to give to, any person, firm,
corporation, or other entity other than the Grantor, the Grantee, and their
respective successors and assigns, any right or remedy under or by reason of
this Xxxx of Sale and Assignment or any term, covenant, or condition hereof, and
all the terms, covenants, conditions, promises, and agreements contained in this
Xxxx of Sale and Assignment shall be for the sole and exclusive benefit of the
Grantor, the Grantee, and their respective successors and assigns.
Concurrently, with the execution hereof Grantor, Grantee, Xxxxxxxxx
Xxxxxxx, Xxxx XxXxxxxx and NationsBank of Texas, N.A. (the "Escrow Agent") are
entering into that certain Indemnification Escrow Agreement (the "Escrow
Agreement"). Pursuant to the terms of the Escrow Agreement, Grantee is
depositing $96,000 of the Purchase Price with the Escrow Agent.
The terms and conditions of this Xxxx of Sale and Assignment shall be
governed and construed in accordance with the laws of the State of Illinois.
IN WITNESS WHEREOF, the undersigned has executed this Xxxx of Sale as of
this __ day of _________, 1995.
BEST PAGE, INC.
By:
------------------------------------
Xxxxxxxxx Xxxxxxx
President
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EXHIBIT H
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this "Agreement") is made and entered into
as of ___________, 1995, by and among Best Page, Inc., an Illinois corporation
(the "Seller"), Xxxxxxxxx Xxxxxxx (the "Shareholder"), and Contact
Communications Inc., a Delaware corporation (the "Purchaser").
R E C I T A L S
A. The Shareholder owns all the outstanding capital stock of the Seller.
B. Concurrently with the execution and delivery hereof, the Seller has
sold to the Purchaser certain assets and properties of the Seller (the
"Transferred Assets") pursuant to that certain Assignment and Xxxx of Sale of
even date herewith, by and among the Purchaser and the Seller (the "Xxxx of
Sale").
C. In connection with the transactions contemplated by the Xxxx of Sale,
the Seller and the Shareholder have agreed to indemnify the Purchaser with
respect to certain liabilities.
A G R E E M E N T S
NOW, THEREFORE, in consideration of the respective representations,
warranties, agreements, and conditions hereinafter set forth, and other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. INDEMNIFICATION OF THE PURCHASER. The Seller and the Shareholder
jointly and severally agree to indemnify and hold harmless the Purchaser and
each officer, director, employee, consultant, stockholder, and affiliate of the
Purchaser (collectively, the "Purchaser Indemnified Parties") from and against
any and all damages, losses, claims, liabilities, demands, charges, suits,
penalties, costs, and expenses (including court costs and attorneys' fees and
expenses incurred in investigating and preparing for any litigation or
proceeding) (collectively, "Purchaser Indemnified Costs") which any of the
Purchaser Indemnified Parties may sustain, or to which any of the Purchaser
Indemnified Parties may be subjected, arising out of any breach or default by
the Seller of or under any of the representations, warranties, covenants,
agreements, or other provisions of the Xxxx of Sale or any agreement or document
executed in connection herewith.
2. DEFENSE OF THIRD-PARTY CLAIMS. A Purchaser Indemnified Party shall
give prompt written notice to any entity or person who is obligated to provide
indemnification hereunder (an "Indemnifying Party") of the commencement or
assertion of any action, proceeding, demand, or claim by a third party
(collectively, a "third-party action") in respect
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of which such Purchaser Indemnified Party shall seek indemnification
hereunder. Any failure so to notify an Indemnifying Party shall not relieve
such Indemnifying Party from any liability that it or he may have to such
Purchaser Indemnified Party under this Agreement unless the failure to give
such notice materially and adversely prejudices such Indemnifying Party. The
Indemnifying Parties shall have the right to assume control of the defense
of, settle, or otherwise dispose of such third-party action on such terms as
they deem appropriate; provided, however, that:
a. The Purchaser Indemnified Party shall be entitled, at his, her,
or its own expense, to participate in the defense of such third-party
action (provided, however, that the Indemnifying Parties shall pay the
attorneys' fees of the Purchaser Indemnified Party if (i) the employment of
separate counsel shall have been authorized in writing by any such
Indemnifying Party in connection with the defense of such third-party
action, (ii) the Indemnifying Parties shall not have employed counsel
reasonably satisfactory to the Purchaser Indemnified Party to have charge
of such third-party action, (iii) the Purchaser Indemnified Party shall
have reasonably concluded that there may be defenses available to such
Purchaser Indemnified Party that are different from or additional to those
available to the Indemnifying Parties, or (iv) the Purchaser Indemnified
Party's counsel shall have advised the Purchaser Indemnified Party in
writing, with a copy to the Indemnifying Parties, that there is a conflict
of interest that could make it inappropriate under applicable standards of
professional conduct to have common counsel);
b. The Indemnifying Parties shall obtain the prior written approval
of the Purchaser Indemnified Party before entering into or making any
settlement, compromise, admission, or acknowledgement of the validity of
such third-party action or any liability in respect thereof if, pursuant to
or as a result of such settlement, compromise, admission, or
acknowledgement, injunctive or other equitable relief would be imposed
against the Purchaser Indemnified Party or if, in the opinion of the
Purchaser Indemnified Party, such settlement, compromise, admission, or
acknowledgement could have a material adverse effect on its business or, in
the case of an Purchaser Indemnified Party who is a natural person, on his
or her assets or interests;
c. No Indemnifying Party shall consent to the entry of any judgment
or enter into any settlement that does not include as an unconditional term
thereof the giving by each claimant or plaintiff to each Purchaser
Indemnified Party of a release from all liability in respect of such third-
party action; and
d. The Indemnifying Parties shall not be entitled to control (but
shall be entitled to participate at their own expense in the defense of),
and the Purchaser Indemnified Party shall be entitled to have sole control
over, the defense or settlement, compromise, admission, or acknowledgement
of any third-party action (i) as to which the Indemnifying Parties fail to
assume the defense within a reasonable length of time or (ii) to the extent
the third-party action seeks an order,
H-2
injunction, or other equitable relief against the Purchaser Indemnified
Party which, if successful, would materially adversely affect the
business, operations, assets, or financial condition of the Purchaser
Indemnified Party; PROVIDED, HOWEVER, that the Purchaser Indemnified
Party shall make no settlement, compromise, admission, or
acknowledgement that would give rise to liability on the part of any
Indemnifying Party without the prior written consent of such
Indemnifying Party.
The parties hereto shall extend reasonable cooperation in connection with the
defense of any third-party action pursuant to this Agreement and, in connection
therewith, shall furnish such records, information, and testimony and attend
such conferences, discovery proceedings, hearings, trials, and appeals as may be
reasonably requested.
3. DIRECT CLAIMS. In any case in which a Purchaser Indemnified Party
seeks indemnification hereunder which is not subject to Section 2 hereof because
no third-party action is involved, the Purchaser Indemnified Party shall notify
the Indemnifying Parties in writing of any Purchaser Indemnified Costs which
such Purchaser Indemnified Party claims are subject to indemnification under the
terms hereof. The failure of the Purchaser Indemnified Party to exercise
promptness in such notification shall not amount to a waiver of such claim
unless the resulting delay materially prejudices the position of the
Indemnifying Parties with respect to such claim.
4. ESCROW. Concurrently herewith the Purchaser, the Seller, the
Shareholder, Xxxx XxXxxxxx and Nations Bank of Texas, N.A. (the "Escrow Agent")
will enter into that certain Indemnification Escrow Agreement in accordance with
which the Purchaser shall, at Closing, deposit $96,000 with the Escrow Agent.
If any claim for indemnification a Purchaser Indemnified Party pursuant to this
Agreement prior to the Release Date (as defined in the Indemnification Escrow
Agreement), such Purchaser Indemnified Party may apply for payment of any such
Purchaser Indemnified Costs up to the amount of $96,000 in accordance with the
provisions of the Indemnification Escrow Agreement and this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement in
one or more counterparts (all of which shall constitute one and the same
agreement) as of the day and year first above written.
CONTACT COMMUNICATIONS INC.
By:
------------------------------------
Xxxx X. Xxxxx, Vice President
and General Counsel
BEST PAGE, INC.
By:
------------------------------------
Xxxxxxxxx Xxxxxxx, President
-----------------------------------------
Xxxxxxxxx Xxxxxxx
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