SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
_______________________
Date of Report
(Date of earliest
event reported): July 13, 1995
LINCOLN TELECOMMUNICATIONS COMPANY
(Exact name of registrant as specified in its charter)
Nebraska 2-70020 47-0632436
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
1440 M Street, Lincoln, Nebraska 68508
(Address of principal executive offices including zip code)
(402) 474-2211
(Registrant's telephone number)
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 13, 1995 Lincoln Telecommunications Company, a Nebraska
corporation (the "Company"), consummated the merger (the "Merger") of
Nebraska Cellular Telephone Corporation, a Nebraska corporation ("NCTC"),
with and into Capital Acquisition Corp., a Nebraska corporation and
wholly-owned subsidiary of the Company ("Subsidiary"). The Company issued
a total of 4,267,146 shares of its common stock, par value $.25 ("Common
Stock") and paid a total of approximately $22.1 million in cash to the
shareholders of NCTC not affiliated with the Company at the time of the
Merger. The Merger was consummated in accordance with the terms of an
Agreement and Plan of Reorganization dated as of March 21, 1995 by and
among the Company, Subsidiary and NCTC, as amended by the Amendment to
Agreement and Plan or Reorganization dated as of April 7, 1995 by and
among the Company, Subsidiary and NCTC (as so amended, the "Agreement and
Plan of Reorganization"). Subsidiary changed its name to Nebraska
Cellular Telephone Corporation immediately after consummation of the
Merger.
The Company and its affiliates owned approximately 41.65% of the
outstanding NCTC common stock prior to the consummation of the Merger, due
to the acquisition immediately prior to the Merger of Nebwest Cellular,
Inc., a Nebraska corporation and the single largest common shareholder of
NCTC ("Nebwest"). The acquisition of Nebwest was accomplished by
Subsidiary through the purchase of all the outstanding capital stock of
Nebwest (the "Stock Purchase") for a total of approximately $39.5 million
in cash. The Stock Purchase was consummated in accordance with the terms
of a Stock Purchase Agreement dated as of April 28, 1995 by and among
Subsidiary, Nebwest and the shareholders of Nebwest (the "Stock Purchase
Agreement"). Nebwest's sole asset was shares of NCTC common stock
representing approximately 25.5% of the total outstanding NCTC common
stock.
The Company issued a total of 4,267,146 shares of its common stock
and paid a total of approximately $61.6 million cash to acquire NCTC
through the Stock Purchase and the Merger. In each of the Stock Purchase
and the Merger, the Company paid consideration valued at $20.00 per share
of NCTC common stock for an aggregate total price of approximately $132.0
million for all such shares of NCTC common stock not owned by the Company
or its affiliates (assuming a value of $16.50 per share for the Common
Stock issued pursuant to the Merger; on July 13, 1995 the last reported
sale price for Common Stock on the Nasdaq Stock Market was $16.50 per
share).
The source of funds for the cash paid by the Company in connection
with the Stock Purchase and the Merger is a short-term financing
arrangement between the Company and The Mitsubishi Bank Limited.
The Agreement and Plan of Reorganization and the Stock Purchase
Agreement are filed as exhibits to this Current Report on Form 8-K and are
incorporated herein by reference. The brief summaries of the material
provisions of such agreements set forth above are qualified in their
entirety by reference to each respective agreement filed as an exhibit
hereto.
NCTC was a provider of cellular telecommunications services in 10
rural service areas in the State of Nebraska.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired
Independent Auditors' Report
Audited Financial Statements
Balance Sheets as of December 31, 1994 and 1993
Statements of Earnings for the years ended December 31,
1994 and 1993
Statements of Stockholders' Equity for the years ended
December 31, 1994 and 1993
Statements of Cash Flows for the years ended December 31,
1994 and 1993
Unaudited Condensed Financial Statements
Condensed Balance Sheet as of March 31, 1995
Condensed Statements of Earnings for the three months
ended March 31, 1995 and 1994
Condensed Statements of Cash Flows for the three months
ended March 31, 1995 and 1994
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
Nebraska Cellular Telephone Corporation:
We have audited the balance sheets of Nebraska Cellular Telephone
Corporation as of December 31, 1994 and 1993, and the related statements
of earnings, stockholders' equity and cash flows for the years then ended.
These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Nebraska Cellular
Telephone Corporation as of December 31, 1994 and 1993, and the results of
its operations and its cash flows for the years then ended in conformity
with generally accepted accounting principles.
/s/ KPMG Peat Marwick LLP
February 24, 1995
<PAGE>
NEBRASKA CELLULAR TELEPHONE CORPORATION
Balance Sheets
December 31, 1994 and 1993
Assets (note 3) 1994 1993
Current assets:
Cash and temporary investments $ 638,619 $ 3,068,498
Accounts receivable, net of
allowance for doubtful accounts
of $169,849 in 1994 and $104,613
in 1993 3,547,905 1,815,258
Unbilled revenues 437,855 359,011
Inventories 1,354,418 448,913
Other receivables (note 6) 428,768 255,478
Prepaid expenses 188,946 165,218
Income tax receivable 248,141 --
--------- ----------
Total current assets 6,844,652 6,112,376
Land, plant and equipment, at cost
(note 6):
Land and improvements 201,418 190,526
Buildings and improvements 3,662,211 2,280,068
Equipment 21,326,921 12,686,563
Furniture and fixtures 286,686 116,095
Construction in progress 1,972,330 1,268,422
---------- ----------
Total plant and equipment 27,449,566 16,541,674
Less accumulated depreciation and
amortization (5,664,465) (3,602,035)
----------- -----------
Net plant and equipment 21,785,101 12,939,639
----------- ----------
Investments, at cost 1,683,943 747,077
Deposits 54,647 54,293
----------- -----------
$30,368,343 19,853,385
Liabilities and Stockholders' Equity =========== ==========
Current liabilities:
Accounts payable 3,067,773 1,978,615
Current installments of notes
payable (note 3) 1,692,374 913,500
Accrued expenses 1,349,952 1,104,472
Customer deposits and advance
billings 1,087,457 743,321
Income tax payable -- 549,051
---------- ----------
Total current liabilities 7,197,556 5,288,959
Notes payable, less current
installments (note 3) 12,518,406 5,506,200
Deferred income tax payable (note 7) 207,561 50,000
---------- ---------
Total liabilities 19,923,523 10,845,159
----------- -----------
Stockholders' equity:
Common stock, $.01 par value,
25,000,000 shares authorized;
7,742,180 shares issued and
outstanding 77,422 77,422
Additional paid-in capital 7,731,676 7,731,676
Retained earnings (note 3) 2,635,722 1,199,128
----------- -----------
Total stockholders' equity 10,444,820 9,008,226
---------- -----------
Commitments (notes 4, 5 and 9) $30,368,343 19,853,385
=========== ===========
See accompanying notes to financial statements.
<PAGE>
NEBRASKA CELLULAR TELEPHONE CORPORATION
Statements of Earnings
Years ended December 31, 1994 and 1993
1994 1993
Revenues (note 3):
Access and feature services $10,499,488 4,905,964
Airtime services 7,915,844 4,597,684
Long distance services 448,734 247,649
Roamer revenue 8,310,243 5,348,066
Equipment sales 3,760,180 2,110,972
---------- ----------
Total revenues 30,934,489 17,210,335
Cost of sales and services 11,080,082 5,731,585
----------- -----------
Gross profit 19,854,407 11,478,750
----------- -----------
Operating expenses:
Depreciation and amortization 2,584,196 1,603,648
Site and technical expenses 1,915,259 1,368,738
Selling, general and
administrative 12,875,684 6,001,346
----------- -----------
Total operating expenses 17,375,139 8,973,732
----------- -----------
Operating income 2,479,268 2,505,018
---------- ----------
Other income (expense):
Interest income 126,331 101,013
Interest expense (546,314) (312,798)
Other, net 58,707 278,534
----------- -----------
(361,276) 66,749
----------- -----------
Net earnings before income
taxes 2,117,992 2,571,767
Income tax expense (note 7) 681,398 640,000
----------- -----------
Net earnings $1,436,594 1,931,767
========== ==========
See accompanying notes to financial statements.
<PAGE>
<TABLE>
NEBRASKA CELLULAR TELEPHONE CORPORATION
Statements of Stockholders' Equity
Years ended December 31, 1994 and 1993
<CAPTION>
Total
Additional Retained stock-
Common paid-in earnings holders'
stock capital (deficit) equity
<S> <C> <C> <C> <C>
Balances at December 31,
1992 $ 77,422 7,731,676 (732,639) 7,076,459
Net earnings -- -- 1,931,767 1,931,767
--------- --------- ---------- ----------
Balances at December 31,
1993 77,422 7,731,676 1,199,128 9,008,226
Net earnings -- -- 1,436,594 1,436,594
--------- --------- ---------- ----------
Balances at December 31,
1994 $ 77,422 7,731,676 2,635,722 10,444,820
========== ========= ========= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
NEBRASKA CELLULAR TELEPHONE CORPORATION
Statements of Cash Flows
Years ended December 31, 1994 and 1993
1994 1993
Cash flows from operating activities:
Net earnings $ 1,436,594 $ 1,931,767
----------- -----------
Adjustments to reconcile net
earnings to net cash provided by
operating activities:
Depreciation and amortization 2,584,196 1,603,648
Deferred income taxes 157,561 50,000
Provision for doubtful accounts 84,000 65,000
Loss on disposal of fixed assets 185,376 --
Change in assets and
liabilities:
Accounts receivable (1,816,647) (772,177)
Unbilled revenues (78,844) 19,894
Inventories (905,505) (173,747)
Other receivables (173,290) (246,823)
Prepaid expenses (23,728) (48,580)
Deposits (2,354) (5,024)
Accounts payable 1,089,158 1,331,370
Accrued expenses 245,480 673,307
Customer deposits and
advance billings 344,136 622,178
Income tax payable/
receivable (797,191) 512,638
---------- ----------
Total adjustments 892,348 3,631,684
----------- -----------
Net cash provided by
operating activities 2,328,942 5,563,451
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (11,613,035) (5,936,002)
LB775 refund received -- 540,633
------------ ------------
Net cash used by investing
activities (11,613,035) (5,395,369)
----------- ------------
Cash flows from financing activities:
Net proceeds from note payable 7,945,355 --
Payments on note payable (1,091,141) (392,522)
----------- ------------
Net cash provided (used) by
financing activities 6,854,214 (392,522)
----------- ------------
Net decrease in cash and
temporary investments (2,429,879) (224,440)
Cash and temporary investments at
beginning of year 3,068,498 3,292,938
----------- ------------
Cash and temporary investments at end
of year $ 638,619 3,068,498
========== ==========
Supplemental disclosure of cash flow
information:
Interest paid $ 546,314 312,798
Income taxes paid 1,275,000 22,720
========== ===========
See accompanying notes to financial statements.
<PAGE>
NEBRASKA CELLULAR TELEPHONE CORPORATION
Notes to Financial Statements
December 31, 1994 and 1993
(1) Description of Company
Nebraska Cellular Telephone Corporation (the Company) was
incorporated as a Nebraska corporation on November 23, 1987. The
Company's common stock is owned collectively by Local Exchange
Carrier Telephone Companies (LECs) or their affiliates. The Company
is licensed to operate the wireline cellular telecommunications
system serving the ten Nebraska Rural Service Areas (RSA), consisting
of the entire State of Nebraska, except Dakota, Douglas, Lancaster
and Sarpy counties.
(2) Summary of Significant Accounting Policies
Cash and Temporary Investments
Temporary investments consist of bank repurchase agreements
stated at cost, which approximate market value, and have maturities
of less than 120 days from date of purchase.
Revenues
Billings for revenues are rendered monthly. Unbilled
revenues, representing estimated customer usage for the period
between the last billing date and the end of the period, are accrued
in the period the services are provided. Advance billings are
recorded as a liability and subsequently recognized as income in the
period earned.
Inventories
Inventories consist of cellular telephone equipment and
accessories and are valued at the lower of cost (specific
identification method) or market.
Plant and Equipment
Plant and equipment are depreciated over the estimated useful
lives of the assets by primarily the straight-line method. Leasehold
improvements are amortized straight line over the terms of the
leases.
Investments
Investments consist primarily of Rural Telephone Finance
Cooperative (RTFC) Subordinated Capital Certificates which mature in
varying amounts beginning in March 1996 through April 2004.
Income Taxes
Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and
liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to
taxable income in the years in which those temporary differences are
expected to be recovered or settled. The effect on deferred tax
assets and liabilities of a change in tax rates is recognized in
income in the period that includes the enactment date. Also, the tax
benefit from utilization of a net operating loss carryforward is not
presented as an extraordinary item.
(3) Notes Payable
The Company has entered into loan agreements with the RTFC for up to
$20,000,000 of financing. Of the total commitment, $18,000,000 of
the financing is available for the construction and operation of the
statewide cellular telephone system. The remaining balance is to be
utilized to purchase RTFC Subordinated Capital Certificates, and is
treated as a noncash transaction for cash flow purposes. Under these
agreements, the RTFC has committed $10,750,000 to be available
through April 1996.
The terms of the agreements consist of ten-year installment notes,
with quarterly interest payments. Interest is based on a variable
rate adjusted monthly, 6.35 percent at December 31, 1994.
Installments, including interest, are being made quarterly over the
life of the respective note, based on a level, debt service
amortization schedule. Based on current terms, interest rate and
outstanding principal balance, the aggregate principal payments for
the five years subsequent to December 31, 1994 approximate
$1,692,000, $2,274,000, $2,471,000, $2,683,000 and $1,816,000,
respectively. All assets and revenues of the Company are pledged as
collateral for the notes. The loan agreements have various
restrictions and limitations on dividends, additional indebtedness
and maintaining certain financial ratios. In management's opinion,
the Company has complied with all requirements and covenants of the
loan agreements.
(4) Operating Leases
The Company has an operating lease agreement for office space in
Grand Island, Nebraska through March 2000. The Company has the
option to renew the lease for two additional five-year periods. The
minimum annual lease payment under the terms of the lease
approximates $61,000. The Company has also entered into numerous
other operating lease agreements for various building space, towers
and land sites. Terms of the leases are between one and ten years,
with various renewal options and escalation clauses. Rental expense
for operating leases during 1994 and 1993 was approximately $249,000
and $202,000, respectively.
Approximate future minimum lease payments under noncancelable
operating leases as of December 31, 1994, are shown below:
Year ending December 31:
1995 $222,000
1996 209,000
1997 208,000
1998 201,000
1999 196,000
Thereafter 276,000
----------
Total future minimum lease payments $1,312,000
==========
(5) Benefit Plans
The Company has a 401(k) savings plan (a defined contribution plan)
for employees who have been employed for at least one year. Each
eligible employee may contribute an amount from 1 to 6 percent of
their annual base salary. The Company contributes an amount equal to
70 percent of the employees' contributions up to 6 percent.
Employees may also contribute up to an additional 9 percent of their
annual salary, subject to Internal Revenue Service limitations. In
addition, the Company contributes 1 percent of all participating
employees' salaries. The Company's contributions totaled $46,718 and
$27,890 for the years ended December 31, 1994 and 1993, respectively.
Employees become 100 percent vested in the Company's contributions
after six years.
In September 1992, the Company adopted a Performance Unit Plan (Plan)
for certain key employees. The Plan became effective in 1993 and
grants the participants "performance unit rights" (units) based on
the Company achieving certain financial performance targets
determined by a committee of the Board of Directors. The total value
of the units granted in 1993 approximated $17,100. No units were
granted in 1994. Participants become 100 percent vested in the units
after six years.
(6) State Credits
The Company has met the requirements of $3,000,000 in qualified
investments (primarily plant and equipment) and 30 full-time
equivalent employees under Nebraska legislative bill No. 775 (LB775).
The Company is now entitled to receive tax benefits comprised
primarily of refunds of sales and use taxes paid. The Company filed
a refund claim with the Nebraska Department of Revenue in 1993 and
received a refund of approximately $541,000, of sales tax previously
paid on qualified investments. The refunds will be recognized as
income for financial statement and income tax purposes over the
remaining depreciable lives of the related assets on which the sales
tax was incurred. At December 31, 1994, the Company recorded sales
tax paid in 1994 on qualified purchases of approximately $430,000 as
a receivable. A refund of this amount will be requested in 1995.
Under LB775, the Company is also entitled to receive tax benefits
comprised of investment tax credits and compensation credits which
will be used to offset future sales and state income taxes. These
credits can be earned by the Company on qualified investment and
compensation incurred through December 31, 1998 and must be used by
December 31, 2006. As of December 31, 1994, approximately $2,858,000
of cumulative LB775 tax credits remain unused and are available to
offset future state income and sales taxes of the Company. The
Company has recorded a receivable in the accompanying balance sheets
at December 31, 1994 and 1993 for sales taxes paid of approximately
$326,000 and $225,000, respectively.
(7) Income Taxes
Components of income tax expense for 1994 and 1993 are as follows:
1994 1993
Current, Federal $523,837 590,000
Deferred, Federal 157,561 50,000
-------- --------
Total income tax expense $681,398 640,000
======== ========
The provision for income taxes at December 31, 1994 and 1993 differ
from the amount obtained by multiplying net earnings before income
taxes by the Federal statutory tax rates in effect. The reasons for
this difference are shown below:
1994 1993
Computed "expected" Federal tax
expense $720,117 874,400
Other, net (38,719) (8,200)
-------- --------
681,398 866,200
Tax benefit from net operating
loss carryforward
utilized -- (226,200)
-------- --------
Total income tax expense $681,398 640,000
========= =========
The tax effects of temporary differences that give rise to
significant portions of the deferred tax assets and deferred tax
liabilities at December 31, 1994 are shown below:
Federal State
Deferred tax liabilities:
Differences in depreciation $(1,132,514) (239,828)
Other (73,752) (9,435)
---------- ---------
Total deferred tax
liabilities (1,206,266) (249,263)
---------- ---------
Deferred tax assets:
LB775 sales tax refund 44,647 9,455
Alternative minimum tax credit
carryforwards 878,939 --
Bad debt 57,749 12,229
Capitalized start-up costs 16,271 3,446
LB775 credit carryforwards -- 2,858,102
Other 1,099 233
---------- ----------
Total deferred tax assets 988,705 2,883,465
--------- ---------
Net deferred tax asset
(liability) (207,561) 2,634,202
Less valuation allowance -- 2,634,202
---------- ----------
Net deferred tax
liability after
valuation allowance $(207,561) --
========== ==========
Because of the uncertainty of utilizing the LB775 credit
carryforwards in excess of the amount available to offset existing
state deferred tax liabilities, a valuation allowance has been
established for the net deferred tax asset for state income tax
purposes.
The Company has alternative minimum tax (AMT) credit carryforwards of
approximately $879,000 at December 31, 1994. These carryforwards may
be utilized in future years when regular Federal income tax exceeds
AMT tax. These carryforwards have no expiration date and the benefit
to be realized from the utilization of the carryforwards has been
recognized as a deferred tax asset.
(8) Transactions with Related Parties
The Company has had, and expects to have in the future, transactions
in the ordinary course of business with certain LECs and their
affiliates. In management's opinion, such transactions have been at
arm's length and have been on similar terms for comparable
transactions with other nonaffiliated entities.
(9) Contemplated Reorganization
The Board of Directors of the Company is contemplating a plan of
reorganization with a stockholder. Under the plan of the
reorganization, the stockholders of the Company would exchange their
shares for common stock, common stock rights and cash of the
acquiring stockholder. The reorganization is tentatively scheduled
to be effective on or about July 1, 1995. The transaction is
intended to qualify as a merger under the Internal Revenue Code.
<PAGE>
NEBRASKA CELLULAR TELEPHONE CORPORATION
CONDENSED FINANCIAL STATEMENTS
The following unaudited condensed balance sheet, statements of earnings
and cash flows are based on the historical results of Nebraska Cellular
Telephone Corporation as of March 31, 1995 and for the three-month periods
ended March 31, 1995 and 1994. The financial statements are unaudited and
include all adjustments, consisting of normal and recurring adjustments,
necessary for fair presentation with generally accepted accounting
principles.
<PAGE>
NEBRASKA CELLULAR TELEPHONE CORPORATION
Condensed Balance Sheet
March 31, 1995
(unaudited)
(dollars in thousands)
Assets
Current assets:
Cash and cash equivalents $ 933
Accounts receivable 4,238
Other current assets 1,505
-------
Total current assets 6,676
Net Property and equipment 25,523
Investments and other assets 1,930
-------
Total assets $34,129
========
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable 2,090
Accounts Payable and accrued
expenses 4,621
Income taxes payable 279
Other current liabilities 1,087
--------
Total current liabilities 8,077
Deferred income taxes 547
Long-term debt 13,477
Stockholders' equity 12,028
-------
Total liabilities and
stockholders' equity $34,129
=======
<PAGE>
NEBRASKA CELLULAR TELEPHONE CORPORATION
Condensed Statements of Earnings
Three Months Ended March 31, 1995 and 1994
(unaudited)
1995 1994
(dollars in thousands)
Telephone operating revenues $8,643 $5,695
------- -------
Operating expenses:
Operating expenses 2,988 3,163
Cost of goods and services 2,237 2,204
Depreciation and amortization 847 507
------- ------
Total operating expenses 6,072 5,874
------ ------
Operating income 2,571 (179)
Net non-operating income (expense) (121) 48
------ ------
Earnings (loss) before income
taxes 2,450 (131)
Income tax expense (benefit) 866 (31)
------ ------
Net income (loss) $1,584 (100)
====== ======
<PAGE>
NEBRASKA CELLULAR TELEPHONE CORPORATION
Condensed Statements of Cash Flows
Three Months Ended March 31, 1995 and 1994
(unaudited)
1995 1994
(dollars in thousands)
Cash flows from operating activities:
Net income (loss) $1,584 (100)
Adjustments to reconcile net
income (loss) to net cash
provided by operating
activities:
Depreciation and amortization 847 507
Deferred income taxes 339 --
Accounts receivable 117 (492)
Other current assets 38 (85)
Accounts payable and accrued 202 (139)
expenses
Income taxes payable 528 (589)
Other current liabilities (1) 176
------- ------
Net cash provided (used) by
operating activities 3,714 (722)
Cash flows from investing activities,
capital expenditures (4,609) (3,413)
Cash flows from financing activities,
net proceeds from long-term debt 1,190 1,991
------- --------
Net increase (decrease) in cash and
cash equivalents 295 (2,144)
Cash and cash equivalents at beginning
of year 638 3,068
------- -------
Cash and cash equivalents at end of
period $ 933 924
======= =======
<PAGE>
(b) Pro forma financial information
Unaudited Pro Forma Condensed Financial Statements
Pro Forma Condensed Balance Sheet as of March 31, 1995
Pro Forma Condensed Statement of Earnings for the three months
ended March 31, 1995
Pro Forma Condensed Statement of Earnings for the year ended
December 31, 1994
Notes to Unaudited Pro Forma Condensed Financial Statements
<PAGE>
PRO FORMA CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma condensed balance sheet and statements
of earnings are based on the historical results of LTEC and NCTC giving
effect to the Merger accounted for as a purchase in accordance with
generally accepted accounting principles. Pro forma adjustments, and the
assumptions on which they are based are described in the accompanying
footnotes to the pro forma condensed financial statements. The
accompanying pro forma condensed balance sheet as of March 31, 1995
contains those pro forma adjustments necessary to reflect the Merger as if
it was consummated on that date. The accompanying pro forma condensed
statements of earnings for the year ended December 31, 1994 and the three
months ended March 31, 1995 contain those pro forma adjustments necessary
to reflect the Merger as if it were consummated on January 1, 1994.
Because these pro forma financial statements are prepared utilizing
certain assumptions, the pro forma financial statements may not be
indicative of actual financial portion or results of operations as of the
date and for the periods presented, respectively.
<PAGE>
<TABLE>
LINCOLN TELECOMMUNICATIONS COMPANY
Pro forma Condensed Balance Sheet
March 31, 1995
(unaudited)
<CAPTION>
Lincoln Nebraska
Telecom- Cellular
munications Telephone
Company Corporation
Assets (Historical) (Historical) Pro forma adjustments Pro forma
Debit Credit
(dollars in thousands)
<S> <C> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 24,650 933 64,605(b) (64,605)(a) 25,583
Temporary investments 22,945 -- -- -- 22,945
Accounts receivable 26,258 4,238 -- -- 30,496
Other current assets 7,832 1,505 -- -- 9,337
------- ------- ------- ------- -------
Total current assets 81,685 6,676 64,605 (64,605) 88,631
Net property and equipment 247,132 25,523 -- -- 272,655
Investments and other assets 53,867 1,930 -- (6,282)(c) 49,515
Deferred charges 18,261 -- -- -- 18,261
Goodwill -- -- 129,267(a) -- 129,267
-------- -------- -------- ------- --------
Total assets $400,945 34,129 193,872 (70,887) 558,059
======== ======= ======= ======= =======
Liabilities and
Stockholders' Equity
Current liabilities:
Notes payable 20,350 2,090 -- 64,605(b) 87,045
Accounts payable and
accrued expenses 27,549 4,621 -- -- 32,170
Income taxes payable 5,971 279 -- -- 6,250
Other current liabilities 10,879 1,087 -- -- 11,966
-------- -------- -------- -------- ---------
Total current
liabilities 64,749 8,077 -- 64,605 137,431
Deferred income taxes 20,788 547 -- -- 21,335
Other deferred credits 65,340 -- -- -- 65,340
Long-term debt 44,000 13,477 -- -- 57,477
Preferred stock 4,499 -- -- -- 4,499
Stockholders' equity 201,569 12,028 (6,282)(c) (64,662)(a) 271,977
-------- -------- -------- --------- ---------
Total liabilities and
stockholders'
equity $400,945 $34,129 (6,282) 129,267 558,059
========= ======== ========= ======== ========
</TABLE>
<PAGE>
<TABLE>
LINCOLN TELECOMMUNICATIONS COMPANY
Pro forma Condensed Statement of Earnings
Three Months Ended March 31, 1995
(unaudited)
<CAPTION>
Lincoln Nebraska
Telecom- Cellular
munications Telephone
Company Corporation
(Historical) (Historical) Pro forma adjustments Pro forma
Debit Credit
(dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
Operating revenues:
Telephone operating revenues $44,868 8,643 -- -- 53,511
Other 7,241 -- -- -- 7,241
Intercompany revenues (1,757) -- -- -- (1,757)
--------- -------- -------- -------- ---------
Total operating revenues 50,352 8,643 -- -- 58,995
--------- -------- -------- -------- ---------
Operating expenses:
Depreciation and
amortization 8,018 847 808(d) -- 9,663
Cost of goods and services 4,330 2,237 -- -- 6,567
Other operating expenses 24,431 2,988 -- -- 27,419
Intercompany expenses (1,757) -- -- -- (1,757)
--------- --------- -------- --------- ---------
Total operating expenses 35,022 6,072 808 -- 41,902
-------- --------- -------- --------- ----------
Operating income 15,330 2,571 (808) -- 17,093
Net non-operating expense (254) (121) (1,031)(f) -- (1,406)
-------- --------- ---------- --------- ---------
Earnings before income taxes 15,076 2,450 (1,839) -- 15,687
Income taxes 5,836 866 -- (708)(g) 5,994
-------- --------- -------- -------- --------
Net income 9,240 1,584 (1,839) 708 9,693
Preferred dividends 56 -- -- -- 56
-------- -------- ------- --------- ---------
Earnings available for
common shares $9,184 1,584 (1,839) 708 9,637
======= ======= ======= ===== =======
Earnings per common share .28 .26
===== =====
Weighted average common shares
outstanding (in thousands) 32,372 36,639
====== =========
</TABLE>
<PAGE>
<TABLE>
LINCOLN TELECOMMUNICATIONS COMPANY
Pro forma Condensed Statement of Earnings
Year Ended December 31, 1994
(unaudited)
<CAPTION>
Lincoln
Tele- Nebraska
communi- Cellular
cations Telephone
Company Corporation
(Historical) (Historical) Pro forma adjustments Pro forma
Debit Credit
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Operating revenues:
Telephone operating
revenues $174,694 27,174 -- -- 201,868
Other 29,701 3,760 -- -- 33,461
Intercompany revenues (7,611) -- -- -- (7,611)
--------- -------- --------- --------- ---------
Total operating
revenues 196,784 30,934 -- -- 227,718
-------- -------- -------- -------- --------
Operating expenses:
Depreciation and
amortization 35,625 2,584 3,232(d) -- 41,441
Costs of goods and
services 18,603 11,080 -- -- 29,683
Other operating
expenses 91,874 14,791 698(e) -- 107,363
Intercompany expenses (7,611) -- -- -- (7,611)
--------- -------- -------- -------- --------
Total operating
expenses 138,491 28,455 3,930 -- 170,876
-------- -------- -------- -------- --------
Operating income 58,293 2,479 (3,930) -- 56,842
Net non-operating expense (3,621) (361) (4,124)(f) -- 8,106
-------- -------- -------- ------- --------
Earnings before income
taxes 54,672 2,118 (8,054) -- 48,736
Income taxes 21,067 681 -- (3,101)(g) 18,647
--------- -------- -------- --------- --------
Net income 33,605 1,437 (8,054) 3,101 30,089
Preferred dividends 225 -- -- -- 225
--------- --------- -------- --------- ---------
Earnings available
for common
shares $33,380 1,437 (8,054) 3,101 29,864
======= ======= ========= ======== =======
Earnings per common share 1.03 0.81
===== =====
Weighted average common
shares outstanding (in
thousands) 32,408 36,675
======= =======
</TABLE>
<PAGE>
Notes to Unaudited Pro forma Condensed Financial Statements
The unaudited pro forma condensed balance sheet reflects the historical
financial position at March 31, 1995, with pro forma adjustments as if the
Merger had taken place on March 31, 1995. The unaudited pro forma
statements of earnings for the year ended December 31, 1994 and three
months ended March 31, 1995 reflects the historical results of operations
with pro forma merger adjustments based on the assumption the Merger was
effective as of January 1, 1994. The following adjustments give pro forma
effect to the Merger (in addition to certain reclassifications to conform
presentations):
(a) The acquisition of NCTC will be accounted for as a purchase. Each
outstanding share of NCTC will be cancelled and converted into common
stock of LTEC and/or cash. The actual number of shares of LTEC
common stock issued was 4,267,146 while the number of shares paid in
cash was 2,226,809. The Company believes the fair value of NCTC
assets and liabilities to approximate the historical carrying value.
Shares of NCTC to be paid in cash 2,226,809
Amount per share** 20
------------
44,536,180
------------
Shares of NCTC to be paid in shares and cash 4,267,146
Price per share*** 20.50
------------
87,476,493
-----------
Acquisition cost 132,012,673
Direct costs of acquisition 3,000,000
-----------
Total cost to purchase shares not owned 135,012,673
LTEC cost basis in shares owned at March 31, 1995 6,282,000
-----------
Total cost to purchase all shares 141,294,673
NCTC net assets at March 31, 1995 (12,028,000)
-----------
Excess of purchase price over net asset
required $129,266,673
============
Value of shares issued based on market price of
$16.50 for each share on July 13, 1995 $ 70,407,909
Actual amount paid in cash 64,604,764
------------
Total cost of acquisition $135,012,673
============
** Based on $20.00 cash per share.
*** Based on market value per share of $16.50 on July 13, 1995
and cash paid of $4 per share.
(b) Represents cash proceeds from short-term borrowings to fund purchase
of NCTC.
(c) To eliminate LTEC's net investment in NCTC, previously carried on
cost basis.
(d) The amortization of excess costs over acquired assets over the
estimated useful life of 40 years.
(e) Represents bonuses to be paid to NCTC executives and employees.
(f) Additional interest expense on debt incurred to purchase NCTC
assuming an interest rate on the short-term borrowing of 6.25 percent
on $30,000,000 and 6.50 percent on the remaining $34,605,000.
(g) The tax effect of the pro forma adjustments using a 38.5 percent tax
rate.
<PAGE>
(c) Exhibits
Exhibit Number Description
2.1 Agreement and Plan of Reorganization dated as
of March 21, 1995 by and among the Company,
Subsidiary and NCTC [Incorporated by
reference to Exhibit 2 to the Company's
Form 10-K for the year ended December 31,
1994].
2.2 Amendment to Agreement and Plan of
Reorganization dated as of April 7, 1995 by
and among the Company, Subsidiary and NCTC.
2.3 Stock Purchase Agreement dated as of
April 28, 1995 by and among Subsidiary,
Nebwest, the shareholders of Nebwest and the
Company.
23 Consent of KPMG Peat Marwick LLP.
99 Press Release of the Company dated July 6,
1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
LINCOLN TELECOMMUNICATIONS
COMPANY
Date: July 27, 1995
By: /s/ Michael J. Tavlin
Michael J. Tavlin
Vice President-Treasurer and Secretary
<PAGE>
LINCOLN TELECOMMUNICATIONS COMPANY
EXHIBIT INDEX TO FORM 8-K
Exhibit Number Description
2.1 Agreement and Plan of Reorganization dated as
of March 21, 1995 by and among the Company,
Subsidiary and NCTC [Incorporated by
reference to Exhibit 2 to the Company's
Form 10-K for the year ended December 31,
1994].
2.2 Amendment to Agreement and Plan of
Reorganization dated as of April 7, 1995 by
and among the Company, Subsidiary and NCTC.
2.3 Stock Purchase Agreement dated as of
April 28, 1995 by and among Subsidiary,
Nebwest, the shareholders of Nebwest and the
Company.*
23 Consent of KPMG Peat Marwick LLP.
99 Press Release of the Company dated July 13,
1995.
_______________
* The schedules/exhibits to this document are not filed herewith. The
Registrant agrees to furnish supplementally a copy of any such
schedule/exhibit to the Securities and Exchange Commission upon request.
Exhibit 2.2
AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION
THIS AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION, dated as
of April 7, 1995 (the "Amendment"), by and among LINCOLN
TELECOMMUNICATIONS COMPANY, a Nebraska corporation ("Parent"), CAPITAL
ACQUISITION CORP., a Nebraska corporation ("Subsidiary"), and NEBRASKA
CELLULAR TELEPHONE CORPORATION, a Nebraska corporation ("Company").
Capitalized terms used in this Amendment and not otherwise defined in this
Amendment shall have the meanings set forth in the Reorganization
Agreement described below.
WHEREAS, Parent, Subsidiary and Company have entered into that
certain Agreement and Plan of Reorganization, dated as of March 21, 1995
(the "Reorganization Agreement"); and
WHEREAS, the parties to the Reorganization Agreement deem it
advisable to clarify that any shares of Common Stock of Company purchased
by Parent for cash prior to the Effective Time will be included in
calculating the minimum number of shares of Common Stock of Company for
which Cash Elections must be made in the Merger; and
WHEREAS, Parent, Subsidiary and Company have agreed to amend the
Reorganization Agreement in accordance with the terms set forth herein to
make such clarification; and
WHEREAS, Section 9.3 of the Reorganization Agreement provides
that the Reorganization Agreement may be amended by an instrument in
writing signed on behalf of each of the parties thereto and in compliance
with applicable law;
NOW, THEREFORE, in consideration of the mutual premises
contained herein, the parties agree to amend the Reorganization Agreement
in accordance with the provisions of Section 9.3 as follows:
1. The second proviso in the first sentence of Section 3.1(a) of
the Reorganization Agreement shall be revised to provide as
follows:
"provided further, however, if at the Effective Time the number
of shares of Common Stock subject to Cash Elections is less than
(i) 20% of the number of outstanding shares of Common Stock at
the Effective Time ("Effective Time Shares") (exclusive of
shares of Common Stock owned by Parent on the date hereof),
reduced by (ii) the sum of (A) the number of shares of Common
Stock acquired, directly or indirectly, by Parent, Subsidiary or
any other direct or indirect subsidiary of Parent for cash after
the date hereof (the "LTEC Acquired Shares"), and (B) the number
of Dissenting Shares, in lieu of conversion into Parent Common
Stock, Rights and the Stock Cash Amount as provided above, each
share of Common Stock not then subject to a Cash Election
(exclusive of shares of Common Stock held in the treasury of the
Company, shares of Common Stock owned by Parent, Subsidiary or
any other direct or indirect Subsidiary of Parent, and
Dissenting Shares) shall be converted into (i) a fraction of a
share of Parent Common Stock, a fraction of a Right and a
fraction of the Stock Cash Amount which fraction shall in each
case be equal to the Stock Percentage, plus (ii) the Additional
Cash;"
2. Clauses (iii) and (iv) of the second sentence of Section 3.1(a)
of the Reorganization Agreement shall be revised to provide as
follows:
"(iii) "Cash Election Percentage" means the quotient, expressed
as a percentage (computed to four (4) decimal places), of
dividing (A) the sum of (I) the number of shares of Common Stock
which at the Effective Time are subject to Cash Elections, (II)
the number of LTEC Acquired Shares, and (III) the number of
Dissenting Shares by (B) the number of Effective Time Shares
(exclusive of shares of Common Stock owned by Parent on the date
hereof); (iv) "Additional Cash Percentage" means the quotient,
expressed as a percentage (computed to four (4) decimal places),
of dividing (A) the product of multiplying (I) the Cash
Percentage by (II) the number of Effective Time Shares
(exclusive of shares of Common Stock owned by Parent on the date
hereof), by (B) the excess of (I) the number of Effective Time
Shares (exclusive of shares of Common Stock owned by Parent,
Subsidiary or any other direct or indirect subsidiary of Parent
and exclusive of Dissenting Shares) over (II) the number of
shares of Common Stock which are subject to Cash Elections at
the Effective Time;"
3. The references to the "Agreement" in the Reorganization
Agreement shall be deemed, from and after the date of this
Amendment, to encompass the Reorganization Agreement as amended
by this Amendment.
4. Except as expressly amended pursuant to this Amendment, all
other terms, conditions and provisions of the Reorganization
Agreement shall remain in full force and effect.
5. This Amendment may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Amendment as of the date and
year first above written.
LINCOLN TELECOMMUNICATIONS
COMPANY
("Parent")
By: /s/ Frank H. Hilsabeck
Frank H. Hilsabeck
President and Chief Executive
Officer
CAPITAL ACQUISITION CORP.
("Subsidiary")
By: /s/ Frank H. Hilsabeck
Frank H. Hilsabeck, President
NEBRASKA CELLULAR TELEPHONE
CORPORATION
By: /s/ Kevin J. Wiley
Kevin J. Wiley, President
EXHIBIT 2.3
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of April 28, 1995 (the
"Agreement"), by and among CAPITAL ACQUISITION CORP., a Nebraska
corporation ("Buyer"), NEBWEST CELLULAR, INC., a Nebraska corporation
("Company"), the shareholders of Company identified on the signature page
hereof (each a "Shareholder," and collectively "Shareholders"), and
LINCOLN TELECOMMUNICATIONS COMPANY, a Nebraska corporation ("LTEC").
WHEREAS, Shareholders own all the issued and outstanding shares
of capital stock of Company ("Shares");
WHEREAS, Buyer desires to purchase the Shares from Shareholders
and Shareholders desire to sell the Shares to Buyer, upon the terms and
conditions herein set forth; and
WHEREAS, Shareholders wish to designate the Shareholders' Agents
(as hereinafter defined) as their agents and attorneys-in-fact with the
authority to act on their behalf in connection with certain matters
relating to the sale of the Shares to Buyer.
NOW THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, agreements and
conditions hereinafter set forth, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I
Purchase and Sale of Shares
Subject to the terms and conditions of this Agreement, on the Closing
Date (as hereinafter defined) Shareholders shall sell to Buyer and Buyer
shall purchase from Shareholders all the Shares.
ARTICLE II
Purchase Price
2.1. Purchase Price. The purchase price (the "Purchase Price") payable
for the Shares shall be the sum of Thirty-nine Million Five Hundred
Twenty-two Thousand Seven Hundred Forty Dollars ($39,522,740), or
$3.107509 per Share (rounded to six decimal places). The Purchase Price
is based upon a price of $20 per share for the 1,976,137 shares of common
stock of Nebraska Cellular Telephone Corporation, a Nebraska corporation
("NCTC") owned by the Company ("NCTC Shares"). If LTEC, Buyer or any
affiliate of LTEC or Buyer agrees to pay total consideration valued in
excess of $20 per share for any NCTC common stock ("NCTC Common Stock")
pursuant to an amendment to the Agreement and Plan of Reorganization,
dated as of March 21, 1995 ("Reorganization Agreement") by and among LTEC,
Buyer and NCTC, then the Purchase Price shall be adjusted to a cash amount
equal to the value of the total consideration the Shareholders would have
received had the NCTC Shares been exchanged in the Merger (as defined in
the Reorganization Agreement); provided, however, that in determining the
amount of such total consideration, the value of any LTEC Common Stock
comprising such total consideration shall be calculated based upon the
last reported closing price of LTEC Common Stock, $.25 par value, on the
Nasdaq National Market on the business day immediately preceding the date
of such amendment, and the tax consequences of the Merger shall not be
taken into account.
2.2. Payment of Purchase Price. The Purchase Price shall be paid by
Buyer as follows:
2.2.(a) Cash to Shareholders. At the Closing, Buyer shall
deliver in cash, pro rata to each Shareholder in proportion to their
ownership of the Shares, the Purchase Price.
2.2.(b) Method of Payment. All payments under this Section 2.2
shall be made in the form of certified or bank cashier's check payable
to the order of the recipient or, at the recipient's option, by wire
transfer of immediately available funds to an account designated by the
recipient not less than 48 hours prior to the time for payment specified
herein.
ARTICLE III
Joint and Several Representations and Warranties of Company and
Shareholders
Company and Shareholders, jointly and severally, make the following
representations and warranties to Buyer, each of which is true and correct
on the date hereof, shall remain true and correct to and including the
Closing Date, shall be unaffected by any investigation heretofore or
hereafter made by Buyer, or any knowledge of Buyer other than as
specifically disclosed in the Disclosure Schedule delivered to Buyer at
the time of the execution of this Agreement, and shall survive the Closing
of the transactions provided for herein; provided, however, that any
indemnification obligation relating to such representations and warranties
shall be limited as provided in Section 8.7. Regardless of the foregoing,
the representations and warranties set forth in Sections 3.2 and 3.3 with
respect to each Shareholder are made severally by each Shareholder, with
respect to such Shareholder only.
3.1. Corporate.
3.1.(a) Organization. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Nebraska.
3.1.(b) Corporate Power. Company has all requisite corporate
power and authority to own, operate and lease its properties and to
carry on its business as and where such is now being conducted.
3.1.(c) Qualification. Company is not licensed or qualified to
do business as a foreign corporation in any jurisdiction other than
Colorado.
3.1.(d) Subsidiaries. Except for the NCTC Shares, Company does
not own any interest in any corporation, partnership or other entity.
3.1.(e) Corporate Documents, etc. The copies of the Articles
of Incorporation and By-Laws of the Company, including any amendments
thereto, which have been delivered by Shareholders to Buyer are true,
correct and complete copies of such instruments as presently in effect.
The corporate minute book and stock records of the Company which have
been furnished to Buyer for inspection are true, correct and complete
and accurately reflect all material corporate action taken by the
Company. The directors and officers of the Company are listed in
Schedule 3.1.(e).
3.1.(f) Capitalization of the Company. The authorized capital
stock of the Company consists entirely of 20,000,000 shares of common
stock, par value $.001 per share ("Common Stock"). No shares of such
Common Stock are issued or outstanding except for 12,718,462 shares of
Common Stock which are owned of record and beneficially by Shareholders
in the respective numbers set forth in Schedule 3.1.(f). All such
shares of Common Stock of the Company are validly issued, fully paid and
nonassessable. There are no (a) securities convertible into or
exchangeable for any of the Company's capital stock or other securities,
(b) options, warrants or other rights to purchase or subscribe to
capital stock or other securities of the Company or securities which are
convertible into or exchangeable for capital stock or other securities
of the Company, or (c) contracts, commitments, agreements,
understandings or arrangements of any kind relating to the issuance,
sale or transfer of any capital stock or other equity securities of the
Company, any such convertible or exchangeable securities or any such
options, warrants or other rights, except for the Shareholders'
Agreement dated September 22, 1992 among the Company and the
Shareholders (the "1992 Agreement").
3.2. Shareholders.
3.2.(a) Power. Each Shareholder has full power, legal right
and authority to enter into, execute and deliver this Agreement and the
other agreements, instruments and documents contemplated hereby (such
other documents sometimes referred to herein as "Ancillary
Instruments"), and to carry out the transactions contemplated hereby.
3.2.(b) Authorization. The execution and delivery of this
Agreement and the Ancillary Instruments, and full performance
thereunder, have been duly authorized by all necessary corporate action
on the part of each Shareholder, and no other or further corporate act
on the part of any such Shareholder is necessary therefor.
3.2.(c) Validity. This Agreement has been duly and validly
executed and delivered by each Shareholder and is, and when executed and
delivered each Ancillary Instrument will be, the legal, valid and
binding obligation of such Shareholder, enforceable in accordance with
its terms, except as such may be limited by bankruptcy, insolvency,
reorganization or other laws affecting creditors' rights generally, and
by general equitable principles.
3.2.(d) Title. Except as set forth in Schedule 3.2(d), each
Shareholder has good and marketable title to the Shares to be sold by
such Shareholder hereunder, free and clear of all Liens (as defined in
Section 3.10) including, without limitation, voting trusts or
agreements, proxies, marital or community property interests. At the
Closing Buyer will receive good and marketable title to the Shares to be
sold by each Shareholder hereunder, free and clear of all Liens,
including, without limitation, voting trusts or agreements, proxies,
marital or community property interests.
3.2.(e) Prior Purchases of Shares. Except as set forth in
Schedule 3.2(e), each Shareholder acquired all its Shares directly from
the Company. With respect to any Shares identified in Schedule 3.2(e),
such Shares were obtained in transactions in which the Shareholder or
Shareholders party thereto complied in all respects with any and all
statutes, laws, rules or regulations (including any rule of common law
or equity) of any governmental body or court, whether federal or state,
applicable to such Shareholder or Shareholders.
3.3. No Violation. Neither the execution and delivery of this Agreement
or the Ancillary Instruments nor the consummation by Company and
Shareholders of the transactions contemplated hereby and thereby (a) will
violate any statute, law, ordinance, rule or regulation (collectively,
"Laws") or any order, writ, injunction, judgment, plan or decree
(collectively, "Orders") of any court, arbitrator, department, commission,
board, bureau, agency, authority, instrumentality or other body, whether
federal, state, municipal, foreign or other (collectively, "Government
Entities"), (b) except for applicable requirements of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "HSR Act") and
any applicable requirements of the Federal Communications Act, will
require any authorization, consent, approval, exemption or other action by
or notice to any Government Entity, or (c) will violate or conflict with,
or constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or will result in the
termination of, or accelerate the performance required by, or result in
the creation of any Lien upon any of the assets of Company (including, but
not limited to, the Shares) under, any term or provision of the Articles
of Incorporation or By-Laws of Company or of any contract, commitment,
understanding, arrangement, agreement or restriction of any kind or
character to which Company or any Shareholder is a party or by which
Company or any Shareholder or any of its or their assets or properties may
be bound or affected, except for certain restrictions contained in the
1992 Agreement. The consummation by Company and Shareholders of the
transactions contemplated in this Agreement and the Ancillary Documents
will not violate or conflict with, or constitute a default (or an event
which, with notice or lapse of time, or both, would constitute a default)
under, or will result in the termination of, or accelerate the performance
required by, or result in the creation of any Lien upon any of the assets
of Company (including, but not limited to, the Shares) under, any term or
provision of the Articles of Incorporation or By-Laws of Company or of any
contract, commitment, understanding, arrangement, agreement or restriction
of any kind or character to which Company or any Shareholder is a party or
by which Company or any Shareholder or any of its or their assets or
properties may be bound or affected.
3.4. Financial Statements. Included as Schedule 3.4 are true and
complete copies of the financial statements of Company consisting of (i)
balance sheets of Company as of September 30, 1994, 1993, and 1992, and
the related statements of income for the years then ended and (ii) a
balance sheet of the Company as of December 31, 1994. All of such
financial statements are true, complete and accurate, in all material
respects (it being understood that the amounts reflected as property and
equipment represent an arbitrary allocation of cost to certain NCTC
licenses), have been prepared in accordance with the books and records of
Company, and fairly present the assets, liabilities and financial position
and the results of operations of Company as of the dates and for the
periods indicated.
3.5. Tax Matters.
3.5.(a) Tax Returns Filed. All federal, state, foreign,
county, local and other tax returns required to be filed by or on behalf
of Company have been timely filed and when filed were true and correct
in all material respects, and the taxes shown as due thereon were paid
or adequately accrued. True and complete copies of all tax returns or
reports filed by Company for each of its five most recent fiscal years
have been delivered to Buyer. Company has duly withheld and paid all
taxes which it is required to withhold and pay relating to salaries and
other compensation heretofore paid to the directors and officers of
Company.
3.5.(b) Tax Audits. The federal and state income tax returns
of Company have not been audited by the Internal Revenue Service and
appropriate state taxing authorities. Company has not received from the
Internal Revenue Service or from the tax authorities of any state,
county, local or other jurisdiction any notice of underpayment of taxes
or other deficiency which has not been paid nor any objection to any
return or report filed by Company. There are outstanding no agreements
or waivers extending the statutory period of limitations applicable to
any tax return or report.
3.5.(c) Other. Since January 1, 1990 Company has not (i) filed
any consent or agreement under Section 341(f) of the Internal Revenue
Code of 1986, as amended (the "Code"), (ii) applied for any tax ruling,
(iii) entered into a closing agreement with any taxing authority, (iv)
filed an election under Section 338(g) or Section 338(h)(10) of the Code
(nor has a deemed election under Section 338(e) of the Code occurred),
(v) made any payments, or been a party to an agreement (including this
Agreement) that under any circumstances could obligate it to make
payments that will not be deductible because of Section 280G of the
Code, or (vi) been a party to any tax allocation or tax sharing
agreement. The Company is not a "United States real property holding
company" within the meaning of Section 897 of the Code.
3.6. Absence of Certain Changes. Except as and to the extent set forth
in Schedule 3.6, since September 30, 1994 there has not been:
3.6.(a) No Adverse Change. Any adverse change in the financial
condition, assets, liabilities, business, prospects or operations of
Company;
3.6.(b) No Damage. Any loss, damage or destruction, whether
covered by insurance or not, affecting Company's business or properties;
3.6.(c) No Increase in Compensation. Any increase in the
compensation, salaries or wages payable or to become payable to any
director or officer of Company (including, without limitation, any
increase or change pursuant to any bonus, pension, profit sharing,
retirement or other plan or commitment), or any bonus or other employee
benefit granted, made or accrued;
3.6.(d) No Commitments. Any commitment or transaction by
Company (including, without limitation, any borrowing or capital
expenditure) other than in the ordinary course of business consistent
with past practice;
3.6.(e) No Dividends. Any declaration, setting aside, or
payment of any dividend or any other distribution in respect of
Company's capital stock; any redemption, purchase or other acquisition
by Company of any capital stock of Company, or any security relating
thereto; or any other payment to any shareholder of Company as such a
shareholder;
3.6.(f) No Disposition of Property. Any sale, lease or other
transfer or disposition of any properties or assets of Company;
3.6.(g) No Indebtedness. Any indebtedness for borrowed money
incurred, assumed or guaranteed by Company;
3.6.(h) No Liens. Any mortgage, pledge, lien or encumbrance
made on any of the properties or assets of Company;
3.6.(i) No Amendment of Contracts. Any entering into,
amendment or termination by Company of any contract, or any waiver of
material rights thereunder;
3.6.(j) Loans and Advances. Any loan or advance to any person
including, but not limited to, any Affiliate (for purposes of this
Agreement, the term "Affiliate" shall mean and include all Shareholders,
directors and officers of Company; the spouse of any such person; any
person who would be the heir or descendant of any such person if he or
she were not living; and any entity in which any of the foregoing has a
direct or indirect interest, except through ownership of less than 5% of
the outstanding shares of any entity whose securities are listed on a
national securities exchange or traded in the national over-the-counter
market); or
3.6.(k) No Unusual Events. Any other event or condition not in
the ordinary course of business of Company.
3.7. Absence of Undisclosed Liabilities. Except for certain
indebtedness to CommNet Cellular, Inc. ("CommNet") set forth in Schedule
3.6, Company does not have any liabilities, commitments or obligations
(secured or unsecured, and whether accrued, absolute, contingent, direct,
indirect or otherwise). Except as disclosed in this Section 3.7, neither
Company nor any Shareholder has knowledge of any basis for the assertion
against Company of any liability and there are no circumstances,
conditions, happenings, events or arrangements, contractual or otherwise,
which may give rise to liabilities.
3.8. No Litigation. There is no action, suit, arbitration, proceeding,
investigation or inquiry, whether civil, criminal or administrative
("Litigation") pending or threatened against Company, its directors (in
such capacity), its business or any of its assets, nor does Company or any
Shareholder know, or have grounds to know, of any basis for any
Litigation. Neither Company nor its business or assets is subject to any
Order of any Government Entity.
3.9. Compliance With Laws and Orders.
3.9.(a) Compliance. Company (including each and all of its
operations, practices, properties and assets) is in compliance with all
applicable Laws and Orders, including, without limitation, those
applicable to discrimination in employment, occupational safety and
health, trade practices, competition and pricing, product warranties,
zoning, building and sanitation, employment, retirement and labor
relations, product advertising and the Environmental Laws as hereinafter
defined. Company has not received notice of any violation or alleged
violation of, and is subject to no Liability for past or continuing
violation of, any Laws or Orders. All reports and returns required to
be filed by Company with any Government Entity have been filed, and were
accurate and complete in all material respects when filed.
3.9.(b) Licenses and Permits. Company has all licenses,
permits, approvals, authorizations and consents of all Government
Entities and all certification organizations required for the conduct of
the business (as presently conducted and as proposed to be conducted).
All such licenses, permits, approvals, authorizations and consents are
described in Schedule 3.9.(b), are in full force and effect and will not
be affected or made subject to loss, limitation or any obligation to
reapply as a result of the transactions contemplated hereby. Company
(including its operations, properties and assets) is and has been in
compliance with all such permits and licenses, approvals, authorizations
and consents.
3.9.(c) Environmental Matters. The applicable Laws relating to
pollution or protection of the environment, including Laws relating to
emissions, discharges, generation, storage, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic,
hazardous or petroleum or petroleum-based substances or wastes ("Waste")
into the environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface strata) or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Waste including,
without limitation, the Clean Water Act, the Clean Air Act, the Resource
Conservation and Recovery Act, the Toxic Substances Control Act and the
Comprehensive Environmental Response Compensation Liability Act
("CERCLA"), as amended, and their state and local counterparts are
herein collectively referred to as the "Environmental Laws". Without
limiting the generality of the foregoing provisions of this Section 3.9,
Company is in full compliance with all limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in the Environmental Laws or
contained in any regulations, code, plan, order, decree, judgment,
injunction, notice or demand letter issued, entered, promulgated or
approved thereunder. There is no Litigation nor any demand, claim,
hearing or notice of violation pending or threatened against Company
relating in any way to the Environmental Laws or any Order issued,
entered, promulgated or approved thereunder. There are no past or
present (or, to the best of Company's and the Shareholders' knowledge,
future) events, conditions, circumstances, activities, practices,
incidents, actions, omissions or plans which may interfere with or
prevent compliance or continued compliance with the Environmental Laws
or with any Order issued, entered, promulgated or approved thereunder,
or which may give rise to any liability, including, without limitation,
liability under CERCLA or similar state or local Laws, or otherwise form
the basis of any Litigation, hearing, notice of violation, study or
investigation, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling,
or the emission, discharge, release or threatened release into the
environment, of any Waste.
3.10. Title to Properties.
3.10.(a) Marketable Title. Company has good and marketable
title to all of Company's assets, business and properties, free and
clear of all mortgages, liens, (statutory or otherwise) security
interests, claims, pledges, licenses, equities, options, conditional
sales contracts, assessments, levies, easements, covenants,
reservations, restrictions, rights-of-way, exceptions, limitations,
charges or encumbrances of any nature whatsoever (collectively,
"Liens"). None of Company's assets, business or properties are subject
to any restrictions with respect to the transferability thereof; and the
Company's title thereto will not be affected in any way by the
transactions contemplated hereby.
3.10.(b) Real Property. Company does not own, lease or use, and
has never owned, leased or used, any real property or structure.
3.11. Contracts and Commitments.
3.11.(a) Personal Property Leases. Company has no leases of
personal property.
3.11.(b) Purchase Commitments. Company has no purchase
commitments.
3.11.(c) Sales Commitments. Company has no sales contracts or
commitments to customers or distributors.
3.11.(d) Contracts With Affiliates and Certain Others. Except
as set forth in Schedule 3.11(d), Company has no agreement,
understanding, contract or commitment (written or oral) with any
Affiliate or any employee, agent, consultant, distributor, dealer or
franchisee.
3.11.(e) Powers of Attorney. The Company has not given a power
of attorney, which is currently in effect, to any person, firm or
corporation for any purpose whatsoever.
3.11.(f) Loan Agreements. Except with respect to certain
indebtedness to CommNet set forth in Schedule 3.6, Company is not
obligated under any loan agreement, promissory note, letter of credit,
or other evidence of indebtedness as a signatory, guarantor or
otherwise.
3.11.(g) Guarantees. Company has not guaranteed the payment or
performance of any person, firm or corporation, agreed to indemnify any
person or act as a surety, or otherwise agreed to be contingently or
secondarily liable for the obligations of any person.
3.11.(h) No Default. Company is not in default under any lease,
contract or commitment, nor has any event or omission occurred which
through the passage of time or the giving of notice, or both, would
constitute a default thereunder or cause the acceleration of any of
Company's obligations or result in the creation of any Lien on any of
the assets owned, used or occupied by Company. No third party is in
default under any lease, contract or commitment to which Company is a
party, nor has any event or omission occurred which, through the passage
of time or the giving of notice, or both, would constitute a default
thereunder or give rise to an automatic termination, or the right of
discretionary termination, thereof.
3.12. Employee Matters. Company does not have, and has never had,
any employees.
3.13. Employee Benefit Plans. Company does not have and is not
obligated under, and has never had or been obligated under, any pension,
thrift, savings, profit sharing, retirement, incentive bonus or other
bonus, medical, dental, life, accident insurance, benefit, employee
welfare, disability, group insurance, stock purchase, stock option, stock
appreciation, executive or deferred compensation, hospitalization and
other similar fringe or employee benefit plans, programs and arrangements,
and any employment or consulting contracts, "golden parachutes,"
collective bargaining agreements, severance agreements or plans, vacation
or sick leave plans, programs, arrangements and policies, including,
without limitation, all "employee benefit plans" (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended).
3.14. No Brokers or Finders. Neither Company nor any of its
directors, officers, Shareholders or agents have retained, employed or
used any broker or finder in connection with the transaction provided for
herein or in connection with the negotiation thereof.
3.15. Disclosure. No representation or warranty by Company and/or
the Shareholders in this Agreement, nor any statement, certificate,
schedule, document or exhibit hereto furnished or to be furnished by or on
behalf of Company or Shareholders pursuant to this Agreement or in
connection with transactions contemplated hereby, contains or shall
contain any untrue statement of material fact or omits or shall omit a
material fact necessary to make the statements contained therein not
misleading. All statements and information contained in any certificate,
instrument, Disclosure Schedule or document delivered by or on behalf of
Company and/or Shareholders shall be deemed representations and warranties
by the Company and the Shareholders, except that such information
furnished by a Shareholder with respect to such Shareholder shall be
deemed a representation and warranty only by such Shareholder.
ARTICLE IV
Representations and Warranties of Buyer
Buyer makes the following representations and warranties to the
Shareholders, each of which is true and correct on the date hereof, shall
remain true and correct to and including the Closing Date, shall be
unaffected by any investigation heretofore or hereafter made by
Shareholders or any notice to Shareholders, and shall survive the Closing
of the transactions provided for herein.
4.1. Corporate.
4.1.(a) Organization. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Nebraska.
4.1.(b) Corporate Power. Buyer has all requisite corporate
power to enter into this Agreement and the other documents and
instruments to be executed and delivered by Buyer and to carry out the
transactions contemplated hereby and thereby.
4.2. Authority. The execution and delivery of this Agreement and the
other documents and instruments to be executed and delivered by Buyer
pursuant hereto and the consummation of the transactions contemplated
hereby and thereby have been duly authorized by the Board of Directors of
Buyer. No other corporate act or proceeding on the part of Buyer or its
shareholders is necessary to authorize this Agreement or the other
documents and instruments to be executed and delivered by Buyer pursuant
hereto or the consummation of the transactions contemplated hereby and
thereby. This Agreement constitutes, and when executed and delivered, the
other documents and instruments to be executed and delivered by Buyer
pursuant hereto will constitute, valid and binding agreements of Buyer,
enforceable in accordance with their respective terms, except as such may
be limited by bankruptcy, insolvency, reorganization or other laws
affecting creditors' rights generally, and by general equitable
principles.
4.3. No Brokers or Finders. Neither Buyer nor any of its directors,
officers, employees or agents have retained, employed or used any broker
or finder in connection with the transaction provided for herein or in
connection with the negotiation thereof.
4.4. Disclosure. No representation or warranty by Buyer in this
Agreement, nor any statement, certificate, schedule, document or exhibit
hereto furnished or to be furnished by or on behalf of Buyer pursuant to
this Agreement or in connection with transactions contemplated hereby,
contains or shall contain any untrue statement of material fact or omits
or shall omit a material fact necessary to make the statements contained
therein not misleading.
ARTICLE V
Covenants
5.1. General Releases. At the Closing, each Shareholder shall deliver
general releases to Buyer, in form and substance satisfactory to Buyer and
its counsel, releasing Company and the directors, officers and agents of
Company from all claims to the Closing Date. Such releases shall also
contain waivers of any right of contribution or other recourse against
Company with respect to representations, warranties or covenants made
herein by Company.
5.2. HSR Act and Federal Communications Act Filings. Each party shall,
in cooperation with the other parties, file or cause to be filed any
reports or notifications that may be required to be filed by it under (i)
the HSR Act with the Federal Trade Commission and the Antitrust Division
of the Department of Justice and (ii) the Federal Communications Act with
the Federal Communications Commission, and shall furnish to the others all
such information in its possession as may be necessary for the completion
of the reports or notifications to be filed by the other. Prior to making
any communication, written or oral, with the Federal Trade Commission, the
Antitrust Division of the federal Department of Justice, the Federal
Communications Commission or any other governmental agency or authority or
members of their respective staffs with respect to this Agreement or the
transactions contemplated hereby, the Shareholders and the Company shall
consult with Buyer.
5.3. Access to Information and Records. During the period prior to the
Closing, Shareholders shall cause Company to give Buyer, its counsel,
accountants and other representatives (i) access during normal business
hours to all of the properties, books, records, contracts and documents of
Company for the purpose of such inspection, investigation and testing as
Buyer deems appropriate (and Company shall furnish or cause to be
furnished to Buyer and its representatives all information with respect to
the business and affairs of Company as Buyer may request); (ii) access to
employees, agents and representatives for the purposes of such meetings
and communications as Buyer reasonably desires; and (iii) with the prior
consent of Company in each instance (which consent shall not be
unreasonably withheld), access to vendors, customers, manufacturers of its
machinery and equipment, and others having business dealings with Company.
5.4. Conduct of Business Pending the Closing. From the date hereof
until the Closing, except as otherwise approved in writing by Buyer,
Company covenants as follows, and Shareholders shall cause each of the
following to occur:
5.4.(a) No Changes. Company will carry on its business
diligently and in the same manner as heretofore and will not make or
institute any changes in its methods of purchase, sale, management,
accounting or operation.
5.4.(b) Maintain Organization. Company will take such action
as may be necessary to maintain, preserve, renew and keep in favor and
effect the existence, rights and franchises of Company and will use its
best efforts to preserve the business organization of Company intact, to
keep available to Company the present officers.
5.4.(c) No Breach. Company and Shareholders will not do or
omit any act, or permit any omission to act, which may cause a breach of
any material contract, commitment or obligation, or any breach of any
representation, warranty, covenant or agreement made by Company and/or
the Shareholders herein, or which would have required disclosure on
Schedule 3.6 had it occurred after September 30, 1994 and prior to the
date of this Agreement.
5.4.(d) No Material Contracts. No contract or commitment will
be entered into, and no purchase of supplies and no sale of goods or
services (real, personal, or mixed, tangible or intangible) will be
made, by or on behalf of Company.
5.4.(e) No Corporate Changes. Company shall not amend its
Articles of Incorporation or By-Laws or make any changes in its
authorized capital stock or issue any capital stock.
5.4.(f) No Negotiations. Neither Company nor any Shareholder
will directly or indirectly (through a representative or otherwise)
solicit or furnish any information to any prospective buyer, commence,
or conduct negotiations with any other party or enter into any agreement
with any other party concerning the sale of Company, Company's assets or
business or any part thereof or any equity securities of Company (an
"acquisition proposal"), and Company and Shareholders shall immediately
advise Buyer of the receipt of any acquisition proposal.
5.4.(g) No Transfer of Shares. No Shareholder shall transfer
or attempt to transfer any of the Shares except to Buyer pursuant
hereto; and Company shall refuse to accept any certificates for Shares
to be transferred or otherwise to allow such transfers to occur upon its
books.
5.4.(h) No Transfer of Assets. Company shall not transfer any
of its assets, including but not limited to the NCTC Shares.
5.5. Consents. Company and Shareholders will use their best efforts
prior to Closing to obtain all consents necessary for the consummation of
the transactions contemplated hereby.
5.6. Other Action. Company and Shareholders shall use their best
efforts to cause the fulfillment at the earliest practicable date of all
of the conditions to the parties' obligations to consummate the
transactions contemplated in this Agreement.
5.7. Disclosure Schedule. Shareholders and Company shall have a
continuing obligation to promptly notify Buyer in writing with respect to
any matter hereafter arising or discovered which, if existing or known at
the date of this Agreement, would have been required to be set forth or
described in the Disclosure Schedule, but no such disclosure shall cure
any breach of any representation or warranty which is inaccurate.
ARTICLE VI
Conditions Precedent to Buyer's Obligations
Each and every obligation of Buyer to be performed on the Closing Date
shall be subject to the satisfaction prior to or at the Closing of each of
the following conditions:
6.1. Representations and Warranties True of the Closing Date. Each of
the representations and warranties made by Shareholders and Company in
this Agreement, and the statements contained in the Disclosure Schedule or
in any instrument, list, certificate or writing delivered by Shareholders
or Company pursuant to this Agreement, shall be true and correct in all
material respects when made and shall be true and correct in all material
respects at and as of the Closing Date as though such representations and
warranties were made or given on and as of the Closing Date, except for
any changes permitted by the terms of this Agreement or consented to in
writing by Buyer.
6.2. Compliance With Agreement. Shareholders and Company shall have in
all material respects performed and complied with all of their agreements
and obligations under this Agreement which are to be performed or complied
with by them prior to or on the Closing Date, including the delivery of
the closing documents specified in Section 9.1.
6.3. Absence of Litigation. No Litigation shall have been commenced or
threatened, and no investigation by any Government Entity shall have been
commenced, against Buyer, Company or any of the affiliates, officers or
directors of any of them, with respect to the transactions contemplated
hereby.
6.4. Consents and Approvals. All approvals, consents and waivers that
are required to effect the transactions contemplated hereby shall have
been received, and executed counterparts thereof shall have been delivered
to Buyer not less than two business days prior to the Closing.
6.5. Hart-Scott-Rodino Waiting Period. All applicable waiting periods
related to the HSR Act shall have expired.
6.6. Release of Liens. All Liens identified in Schedule 3.2.(d) shall
have been released.
6.7. Termination of 1992 Agreement and Management Agreement. The 1992
Agreement and the Management Agreement dated as of December 5, 1991
between the Company and Cellular, Inc. shall each have been terminated in
accordance with their terms.
6.8. Repayment of CommNet Debt. All indebtedness of the Company,
including all indebtedness to CommNet set forth in Schedule 3.6 or
incurred after the date hereof, shall have been repaid in full.
6.9. Reorganization Agreement. All conditions to the closing of the
transactions contemplated by the Reorganization Agreement shall have been
satisfied or waived.
ARTICLE VII
Conditions Precedent to Shareholders' Obligations
Each and every obligation of Shareholders to be performed on the Closing
Date shall be subject to the satisfaction prior to or at the Closing of
the following conditions:
7.1. Representations and Warranties True on the Closing Date. Each of
the representations and warranties made by Buyer in this Agreement shall
be true and correct in all material respects when made and shall be true
and correct in all material respects at and as of the Closing Date as
though such representations and warranties were made or given on and as of
the Closing Date.
7.2. Compliance With Agreement. Buyer shall have in all material
respects performed and complied with all of Buyer's agreements and
obligations under this Agreement which are to be performed or complied
with by Buyer prior to or on the Closing Date, including the delivery of
the closing documents specified in Section 9.2.
7.3. Absence of Litigation. No Litigation shall have been commenced or
threatened, and no investigation by any Government Entity shall have been
commenced, against Buyer, Company or any of the affiliates, officers or
directors of any of them, with respect to the transactions contemplated
hereby.
7.4. Hart-Scott-Rodino Waiting Period. All applicable waiting periods
related to the HSR Act shall have expired.
7.5. FCA Consents and Approvals. Any approvals, consents and waivers
required under the Federal Communications Act to consummate the
transactions provided for herein shall have been obtained.
7.6. Reorganization Agreement. All conditions to the closing of the
transactions contemplated by the Reorganization Agreement shall have been
satisfied or waived and LTEC shall have advised the Company that such
transactions will be closed promptly following the purchase of the Shares
pursuant to this Agreement.
ARTICLE VIII
Indemnification
8.1. By Shareholders. Subject to the terms and conditions of this
Article VIII, each Shareholder, jointly and severally, hereby agrees to
indemnify, defend and hold harmless LTEC, Buyer, Buyer's directors,
officers, employees and controlled and controlling persons (hereinafter
"Buyer's Affiliates") and the Company from and against all Claims asserted
against, resulting to, imposed upon, or incurred by LTEC, Buyer, Buyer's
Affiliates or the Company, directly or indirectly, by reason of, arising
out of or resulting from (a) the inaccuracy or breach of any
representation or warranty of any Shareholder or Company contained in or
made pursuant to this Agreement (regardless of whether such breach is
deemed "material" for purpose of Section 6.1), or (b) the breach of any
covenant of any Shareholder or the Company contained in this Agreement.
Regardless of the foregoing, however, breaches of the representations and
warranties made by each Shareholder and contained in Sections 3.2 and 3.3
hereof shall be subject only to several indemnification by the respective
Shareholders who shall have made and breached such representations and
warranties. As used in this Article VIII, the term "Claim" shall include
(i) all debts, liabilities and obligations; (ii) all losses, damages
(including, without limitation, consequential damages), judgments, awards,
settlements, costs and expenses (including, without limitation, interest
(including prejudgment interest in any litigated matter), penalties, court
costs and attorneys fees and expenses); and (iii) all demands, claims,
suits, actions, costs of investigation, causes of action, proceedings and
assessments, whether or not ultimately determined to be valid.
8.2. By Buyer. Subject to the terms and conditions of this Article
VIII, Buyer hereby agrees to indemnify, defend and hold harmless each
Shareholder from and against all Claims asserted against, resulting to,
imposed upon or incurred by any such person, directly or indirectly, by
reason of or resulting from (a) the inaccuracy or breach of any
representation or warranty of Buyer contained in or made pursuant to this
Agreement (regardless of whether such breach is deemed "material" for
purposes of Section 7.1), or (b) the breach of any covenant of Buyer
contained in this Agreement.
8.3. Indemnification of Third-Party Claims. The obligations and
liabilities of any party to indemnify any other under this Article VIII
with respect to Claims relating to third parties shall be subject to the
following terms and conditions:
8.3.(a) Notice and Defense. The party or parties to be
indemnified (whether one or more, the "Indemnified Party") will give the
party from whom indemnification is sought (the "Indemnifying Party")
prompt written notice of any such Claim, and the Indemnifying Party will
undertake the defense thereof by representatives chosen by it. In all
matters concerning the Shareholders by virtue of joint and several
liability, the Shareholders' Agents shall give and receive notice and
otherwise act in all respects on their behalf. Failure to give such
notice shall not affect the Indemnifying Party's duty or obligations
under this Article VIII, except to the extent the Indemnifying Party is
prejudiced thereby. So long as the Indemnifying Party is defending any
such Claim actively and in good faith, the Indemnified Party shall not
settle such Claim. The Indemnified Party shall make available to the
Indemnifying Party or its representatives all records and other
materials required by them and in the possession or under the control of
the Indemnified Party, for the use of the Indemnifying Party and its
representatives in defending any such Claim, and shall in other respects
give reasonable cooperation in such defense.
8.3.(b) Failure to Defend. If the Indemnifying Party, within a
reasonable time after notice of any such Claim, fails to defend such
Claim actively and in good faith, the Indemnified Party will (upon
further notice) have the right to undertake the defense, compromise or
settlement of such Claim or consent to the entry of a judgment with
respect to such Claim, on behalf of and for the account and risk of the
Indemnifying Party, and the Indemnifying Party shall thereafter have no
right to challenge the Indemnified Party's defense, compromise,
settlement or consent to judgment therein.
8.3.(c) Indemnified Party's Rights. Anything in this Section
8.3 to the contrary notwithstanding, (i) if there is a reasonable
probability that a Claim may materially and adversely affect the
Indemnified Party other than as a result of money damages or other money
payments, the Indemnified Party shall have the right to defend or
reasonably compromise or settle such Claim, and (ii) the Indemnifying
Party shall not, without the written consent of the Indemnified Party,
settle or compromise any Claim or consent to the entry of any judgment
which does not include as an unconditional term thereof the giving by
the claimant or the plaintiff to the Indemnified Party of a release from
all Liability in respect of such Claim.
8.4. Payment. The Indemnifying Party shall promptly pay the Indemnified
Party any amount due under this Article VIII, which payment may be
accomplished in whole or in part, at the option of the Indemnified Party,
by the Indemnified Party setting off any amount owed to the Indemnifying
Party by the Indemnified Party and delivering a notice of such set-off to
the Indemnifying Party (a "Set-Off Notice"). To the extent set-off is
made by an Indemnified Party in satisfaction or partial satisfaction of an
indemnity obligation under this Article VIII that is disputed by the
Indemnifying Party, upon a subsequent determination by final judgment not
subject to appeal that all or a portion of such indemnity obligation was
not owed to the Indemnified Party, the Indemnified Party shall pay the
Indemnifying Party the amount which was set off and not owed together with
interest from the date of set-off until the date of such payment at an
annual rate equal to the average annual rate in effect as of the date of
the set-off, on those three maturities of United States Treasury
obligations having a remaining life, as of such date, closest to the
period from the date of the set-off to the date of such judgment. Upon
judgment, determination, settlement or compromise of any third party
Claim, the Indemnifying Party shall pay promptly on behalf of the
Indemnified Party, and/or to the Indemnified Party in reimbursement of any
amount theretofore required to be paid by it, the amount so determined by
judgment, determination, settlement or compromise and all other Claims of
the Indemnified Party with respect thereto, unless in the case of a
judgment an appeal is made from the judgment. If the Indemnifying Party
desires to appeal from an adverse judgment, then the Indemnifying Party
shall post and pay the cost of the security or bond to stay execution of
the judgment pending appeal. Upon the payment in full by the Indemnifying
Party of such amounts, the Indemnifying Party shall succeed to the rights
of such Indemnified Party, to the extent not waived in settlement, against
the third party who made such third party Claim.
8.5. Indemnification for Environmental Matters. Without limiting the
generality of the foregoing, each Shareholder, jointly and severally,
agrees to indemnify, reimburse, hold harmless and defend LTEC, Buyer,
Buyer's Affiliates and Company for, from, and against all Claims asserted
against, imposed on, or incurred by any such person, directly or
indirectly, in connection with any pollution, threat to the environment,
or exposure to, or manufacture, processing, distribution, use, treatment,
generation, transport or handling, disposal, emission, discharge, storage
or release of Waste that (A) is related in any way to Company's or any
previous owner's or operator's ownership, operation of their business or
occupancy of any real property owned or used by Company, and (B) in whole
or in part occurred, existed, arose out of conditions or circumstances
that existed, or was caused on or before the Closing Date.
8.6. No Waiver. The closing of the transactions contemplated by this
Agreement shall not constitute a waiver by any party of its rights to
indemnification hereunder, regardless of whether the party seeking
indemnification has knowledge of the breach, violation or failure of
condition constituting the basis of the Claim at or before the Closing,
and regardless of whether such breach, violation or failure is deemed to
be "material" for purposes of Section 10.2.
8.7. Limitations on Indemnification. The following limitations on
indemnification shall apply as to time and amount:
8.7.(a) Time Limitation. No claim or action shall be brought
under this Article VIII for breach of a representation or warranty after
a lapse of four (4) years following the Closing. Regardless of the
foregoing, however, or any other provision of this Agreement:
(i) There shall be no time limitation on claims or actions
brought for any willful breach of any representation or warranty or
any breach of any representation or warranty made by Shareholders
or Company in or pursuant to Sections 3.2(d), 3.5 and 3.9.(c) and
Shareholders hereby waive, but only with respect to Buyer, all
applicable statutory limitation periods with respect thereto.
(ii) Any claim or right to set-off against any claim made by
a party hereunder by delivering a Set-Off Notice or filing a suit
or action in a court of competent jurisdiction or a court
reasonably believed to be of competent jurisdiction for breach of a
representation or warranty prior to the termination of the survival
period for such claim shall be preserved despite the subsequent
termination of such survival period.
(iii) If any act, omission, disclosure or failure to disclose
shall form the basis for a claim for breach of more than one (1)
representation or warranty, and such claims have different periods
of survival hereunder, the termination of the survival period of
one (1) claim shall not affect a party's right to make a claim
based on the breach of representation or warranty still surviving.
8.7.(b) Amount Limitation. The amount paid by any Shareholder
pursuant to the indemnification provisions of this Article VIII shall
not exceed in the aggregate the portion of the Purchase Price payable to
such Shareholder pursuant to Section 2.2.
ARTICLE IX
Closing
The closing of this transaction ("the Closing") shall take place at the
offices of Foley & Lardner, One IBM Plaza, 330 North Wabash Avenue, Suite
3300, Chicago, Illinois 60611, on the first business day immediately
following the date on which the last of the conditions set forth in
Articles VI and VII are fulfilled or waived or at such other time and
place as the parties hereto shall agree upon. Such date is referred to in
this Agreement as the "Closing Date".
9.1. Documents to be Delivered by Company and Shareholders. At the
Closing, Company and Shareholders shall deliver to Buyer the following
documents, in each case duly executed or otherwise in proper form:
9.1.(a) Stock Certificate(s). A stock certificate or
certificates representing the Shares, duly endorsed for transfer or with
duly executed stock powers attached.
9.1.(b) Compliance Certificate. A certificate signed by
Company and each Shareholder that each of the representations and
warranties made by Shareholders and the Company in this Agreement is
true and correct in all material respects on and as of the Closing Date
with the same effect as though such representations and warranties had
been made or given on and as of the Closing Date (except for any changes
permitted by the terms of this Agreement or consented to in writing by
Buyer), and that Company and Shareholders have performed and complied
with all of Company's and Shareholders' obligations under this Agreement
which are to be performed or complied with on or prior to the Closing
Date.
9.1.(c) Opinions of Counsel. A written opinion of McGrath,
North, Mullin & Kratz, P.C., counsel to Company and a written opinion of
counsel to each Shareholder, dated as of the Closing Date, each
addressed to Buyer, substantially in the form provided for in Exhibit A
hereto.
9.1.(d) Certified Resolutions. Certified copies of the
resolutions of the Board of Directors of Company, and of each
Shareholder which is a corporation, authorizing and approving this
Agreement and the consummation of the transactions contemplated by this
Agreement.
9.1.(e) Articles; By-Laws. A copy of the By-Laws of Company
certified by the secretary of Company, and a copy of the Articles of
Incorporation of Company certified by the Secretary of State of the
State of Nebraska.
9.1.(f) Incumbency Certificate. Incumbency certificates
relating to each person executing (as a corporate officer or otherwise
on behalf of another person) any document executed and delivered to
Buyer pursuant to the terms hereof.
9.1.(g) General Releases. The General Releases referred to in
Section 5.1, duly executed by the persons referred to in such Section.
9.1.(h) Resignations. The resignations of each officer, and
each director of the Company, effective as of the Closing Date and in
form satisfactory to Buyer's counsel.
9.1.(i) Release of Liens. Evidence satisfactory to Buyer of
the release of all Liens identified in Schedule 3.2.(d).
9.1.(j) Termination of 1992 Agreement. Evidence satisfactory
to Buyer of the termination of the 1992 Agreement.
9.1.(k) Repayment of CommNet Debt. Evidence satisfactory to
Buyer of the repayment in full of, and the acknowledgment by CommNet of
the repayment of, all indebtedness to CommNet.
9.1.(l) Other Documents. All other documents, instruments or
writings required to be delivered to Buyer at or prior to the Closing
pursuant to this Agreement and such other certificates of authority and
documents as Buyer may reasonably request.
9.2. Documents to be Delivered by Buyer. At the Closing, Buyer shall
deliver to Shareholders the following documents, in each case duly
executed or otherwise in proper form:
9.2.(a) Cash Purchase Price. To Shareholders, certified or
bank cashier's checks (or wire transfer) as required by Section 2.2
hereof.
9.2.(b) Compliance Certificate. A certificate signed by the
chief executive officer of Buyer that the representations and warranties
made by Buyer in this Agreement are true and correct on and as of the
Closing Date with the same effect as though such representations and
warranties had been made or given on and as of the Closing Date (except
for any changes permitted by the terms of this Agreement or consented to
in writing by Company and Shareholders), and that Buyer has performed
and complied with all of Buyer's obligations under this Agreement which
are to be performed or complied with on or prior to the Closing Date.
9.2.(c) Certified Resolutions. A certified copy of the
resolutions of the Board of Directors of Buyer authorizing and approving
this Agreement and the consummation of the transactions contemplated by
this Agreement.
9.2.(d) Incumbency Certificate. Incumbency certificates
relating to each person executing any document executed and delivered to
Company or Shareholders by Buyer pursuant to the terms hereof.
9.2.(e) Other Documents. All other documents, instruments or
writings required to be delivered to Company and Shareholders at or
prior to the Closing pursuant to this Agreement and such other
certificates of authority and documents as Company and Shareholder's
Agents may reasonably request.
ARTICLE X
Termination
10.1. Right of Termination Without Breach. This Agreement may be
terminated without further liability of any party at any time prior to the
Closing:
10.1.(a) by mutual written agreement of Buyer and Shareholders'
Agents;
10.1.(b) by either Buyer or Shareholders' Agents if the Closing
shall not have occurred on or before November 30, 1995 provided the
terminating party has not, through breach of a representation, warranty
or covenant, prevented the Closing from occurring on or before such
date; or
10.1.(c) by either Buyer or Shareholders' Agents upon
termination of the Reorganization Agreement.
10.2. Termination for Breach.
10.2.(a) Termination by Buyer. If (i) there has been a material
violation or breach by any Shareholder or Company of any of the
agreements, representations or warranties contained in this Agreement
which has not been waived in writing by Buyer, or (ii) there has been a
failure of satisfaction of a condition to the obligations of Buyer which
has not been so waived, or (iii) Company, Shareholders' Agents or any
Shareholder shall have attempted to terminate this Agreement under this
Article X or otherwise without grounds to do so, then Buyer may, by
written notice to Shareholders' Agents at any time prior to the Closing
that such violation, breach, failure or wrongful termination attempt is
continuing, terminate this Agreement with the effect set forth in
Section 10.2.(c) hereof.
10.2.(b) Termination by Shareholders' Agents. If (i) there has
been a material violation or breach by Buyer of any of the agreements,
representations or warranties contained in this Agreement which has not
been waived in writing by Shareholders' Agents, or (ii) there has been a
failure of satisfaction of a condition to the obligations of
Shareholders which has not been so waived, or (iii) Buyer shall have
attempted to terminate this Agreement under this Article X or otherwise
without grounds to do so, then Shareholders' Agents may, by written
notice to Buyer at any time prior to the Closing that such violation,
breach, failure or wrongful termination attempt is continuing, terminate
this Agreement with the effect set forth in Section 10.2.(c) hereof.
10.2.(c) Effect of Termination. Termination of this Agreement
pursuant to this Section 10.2 shall not in any way terminate, limit or
restrict the rights and remedies of any party hereto against any other
party which has violated, breached or failed to satisfy any of the
representations, warranties, covenants, agreements, conditions or other
provisions of this Agreement prior to termination hereof. In addition
to the right of any party under common law to redress for any such
breach or violation, each party whose breach or violation has occurred
prior to termination shall jointly and severally indemnify each other
party for whose benefit such representation, warranty, covenant,
agreement or other provision was made ("indemnified party") from and
against all losses, damages (including, without limitation,
consequential damages), costs and expenses (including, without
limitation, interest (including prejudgment interest in any litigated
matter), penalties, court costs, and attorneys fees and expenses)
asserted against, resulting to, imposed upon, or incurred by the
indemnified party, directly or indirectly, by reason of, arising out of
or resulting from such breach or violation; provided, however, that any
termination based upon the breach of any representation and warranty
made by any Shareholder and contained in Sections 3.2 and 3.3 hereof
shall be subject to only several indemnification by the Shareholder or
Shareholders who made and breached such representation and warranty.
Subject to the foregoing, the parties' obligations under Section
11.7.(a) of this Agreement shall survive termination.
ARTICLE XI
Miscellaneous
11.1. Disclosure Schedule. The Schedules have been compiled (the
"Disclosure Schedule") and delivered to Buyer by or on behalf of
Shareholders on the date of this Agreement. Information set forth in the
Disclosure Schedule specifically refers to the article and section of this
Agreement to which such information is responsive and such information
shall not be deemed to have been disclosed with respect to any other
article or section of this Agreement or for any other purpose. The
Disclosure Schedule shall not vary, change or alter the language of the
representations and warranties contained in this Agreement and, to the
extent the language in the Disclosure Schedule does not conform in every
respect to the language of such representations and warranties, such
language in the Disclosure Schedule shall be disregarded and be of no
force or effect.
11.2. Further Assurance. From time to time, at Buyer's request and
without further consideration, Company and Shareholders will execute and
deliver to Buyer such documents and take such other action as Buyer may
reasonably request in order to consummate more effectively the
transactions contemplated hereby.
11.3. Public Statements. Both the timing and the content of all
disclosure to third parties and public announcements concerning the
transactions provided for in this Agreement by either Company or
Shareholders shall be subject to the prior approval of Buyer (which shall
not be unreasonably withheld), except for disclosures or public
announcements which are required by Law, in which case prior notice of
such disclosure or announcement shall be provided to Buyer and LTEC.
11.4. Assignment; Parties in Interest.
11.4.(a) Assignment. Except as expressly provided herein, the
rights and obligations of a party hereunder may not be assigned,
transferred or encumbered without the prior written consent of the other
parties. Notwithstanding the foregoing, Buyer may, without consent of
any other party, cause one or more subsidiaries of Buyer or LTEC or one
or more subsidiaries of LTEC to carry out all or part of the
transactions contemplated hereby; provided, however, that Buyer shall,
nevertheless, remain liable for all of the obligations of Buyer to
Shareholders hereunder.
11.4.(b) Parties in Interest. This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the respective
successors and permitted assigns of the parties hereto. Nothing
contained herein shall be deemed to confer upon any other person any
right or remedy under or by reason of this Agreement.
11.5. Amendment and Modification. Buyer, Company and Shareholders
may amend, modify and supplement this Agreement in such manner as may be
agreed upon in writing between Buyer, Company and Shareholders' Agents;
provided, however, that Buyer may, in Buyer's discretion, require the
execution of any amendment by all the Shareholders personally.
11.6. Notice. All notices, requests, demands and other
communications hereunder shall be given in writing and shall be: (a)
personally delivered; (b) sent by telecopier, facsimile transmission or
other electronic means of transmitting written documents; or (c) sent to
the parties at their respective addresses indicated herein by registered
or certified U.S. mail, return receipt requested and postage prepaid, or
by private overnight mail courier service. The respective addresses to be
used for all such notices, demands or requests are as follows:
(a) If to Buyer, to:
Capital Acquisition Corp.
c/o Lincoln Telecommunications Company
1440 M Street
Lincoln, Nebraska 68508
Attention: Frank H. Hilsabeck
Facsimile: (402) 475-9195
(with a copy to)
Foley & Lardner
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attention: Benjamin F. Garmer, III, Esq.
Facsimile: (414) 297-4900
or to such other person or address as Buyer shall furnish to Shareholders'
Agents in writing.
(b) If to Shareholders, to Shareholders' Agents:
Curtis Telephone Co.
P.O. Box 8
Curtis, Nebraska 69025
Attention: Edward Cole
Facsimile: (308) 367-5556
and
CommNet Cellular, Inc.
5990 Greenwood Plaza Blvd.
Suite 300
Englewood, Colorado 30111
Attention: Thomas D. Flaherty
Facsimile: (303) 694-5590
(with a copy to)
David L. Hefflinger
McGrath, North, Mullin & Kratz, P.C.
One Central Park Plaza, Suite 1400
222 South Fifteenth Street
Omaha, Nebraska 68102
Facsimile: (402) 341-0216
(c) If to Company, to:
Nebwest Cellular, Inc.
c/o CommNet Cellular, Inc.
5990 Greenwood Plaza Blvd.
Englewood, Colorado 30111
Attention: Thomas D. Flaherty
Facsimile: (303) 694-5590
(with a copy to)
David L. Hefflinger
McGrath, North, Mullin & Kratz, P.C.
One Central Park Plaza, Suite 1400
222 South Fifteenth Street
Omaha, Nebraska 68102
Facsimile: (402) 341-0216
In addition, any notice to Company given prior to Closing shall also be
given in the same manner to Shareholders' Agents; and any notice to
Company given after Closing shall also be given in the same manner to
Buyer.
If personally delivered, such communication shall be deemed delivered
upon actual receipt; if electronically transmitted pursuant to this
paragraph, such communication shall be deemed delivered the next business
day after transmission (and sender shall bear the burden of proof of
delivery); if sent by overnight courier pursuant to this paragraph, such
communication shall be deemed delivered upon receipt; and if sent by U.S.
mail pursuant to this paragraph, such communication shall be deemed
delivered as of the date of delivery indicated on the receipt issued by
the relevant postal service, or, if the addressee fails or refuses to
accept delivery, as of the date of such failure or refusal. Delivery to
Shareholders' Agents shall constitute delivery to all Shareholders. Any
party to this Agreement may change its address for the purposes of this
Agreement by giving notice thereof in accordance with this Section.
11.7. Expenses. Regardless of whether or not the transactions
contemplated hereby are consummated:
11.7.(a) Expenses to be Paid by Shareholders. Shareholders
shall pay, and shall indemnify, defend and hold Buyer and Company
harmless from and against, each of the following:
(i) Transfer Taxes. Any sales, use, excise, transfer or
other similar tax imposed with respect to the transactions provided
for in this Agreement, and any interest or penalties related
thereto.
(ii) HSR Act and Federal Communications Act Fees. All
filing fees associated with any filing required to be made under
the HSR Act or the Federal Communications Act with respect to the
transactions contemplated by this Agreement; provided, however,
that Shareholders shall not be required to pay any filing fees in
connection with the Reorganization Agreement.
(iii) Professional Fees. All fees and expenses of their own
and Company's legal, accounting, investment banking and other
professional counsel in connection with the transactions
contemplated hereby.
11.7.(b) Other. Except as otherwise provided herein, each of
the parties shall bear its own expenses and the expenses of its counsel
and other agents in connection with the transactions contemplated
hereby.
11.7.(c) Costs of Litigation. To the extent provided under
applicable law, the parties agree that the prevailing party in any
action brought with respect to or to enforce any right or remedy under
this Agreement shall be entitled to recover from the other party or
parties all reasonable costs and expenses of any nature whatsoever
incurred by the prevailing party in connection with such action,
including without limitation attorneys' fees and prejudgment interest.
11.8. Proxy. Company, at the request and direction of each
Shareholder as evidenced by each such Shareholder's execution of this
Agreement, and in consideration of the representations, warranties,
covenants, agreements and payments to be made to Company and Shareholders
hereunder, hereby irrevocably nominates and appoints Frank H. Hilsabeck
and James M. Strand and each of them, or his or their substitutes (the
"Proxy") as its attorney and proxy to vote any and all NCTC Shares in any
manner as may be determined by the Proxy in his sole and absolute
discretion, at any meeting of stockholders of NCTC and any adjournment
thereof, held, in whole or in part, for the purpose of considering and
voting upon the Reorganization Agreement and the transactions provided for
therein (a "Meeting") and hereby waives any and all right to receive
notice of such Meeting; provided, however, that such nominations and
appointments and the foregoing proxies shall only apply to matters
relating to the consideration and vote upon the Reorganization Agreement
and the transactions provided for therein occurring at the Meeting, and
shall not apply to any other matters considered at the Meeting. Company
and Shareholders hereby expressly acknowledge that the foregoing
irrevocable proxies are coupled with an interest and agree that such
irrevocable proxies shall remain in full force and effect until the vote
upon the Reorganization Agreement and the transactions provided for
therein is completed. In the event that the irrevocable proxies granted
herein are found, for any reason, to be unenforceable or in the event that
the Proxy is prevented from voting the NCTC Shares subject to the
irrevocable proxies by reason of any judicial or administrative order or
otherwise, Company hereby agrees to take any and all actions required by
Buyer in order to vote all of the NCTC Shares at the Meeting with respect
to matters related to the consideration and vote upon the Reorganization
Agreement and the transactions contemplated thereby in the manner that the
Proxy shall designate, and, in such a case, Company shall forthwith
execute a written ballot or proxy to the same effect as advised by the
Proxy.
11.9. Shareholders' Agents; Power of Attorney.
11.9.(a) Shareholders' Agents. The Shareholders hereby appoint
and constitute CommNet and Curtis Telephone Co. ("Curtis"), jointly, as
Shareholders' Agents hereunder, to exercise certain powers on behalf of
Shareholders as set forth in this Agreement; and CommNet and Curtis
hereby accept such appointments. In the event of the death, resignation
or inability to act of either Shareholders' Agent, and upon receipt by
Buyer of evidence of the same which is satisfactory to Buyer, the
remaining Shareholders' Agent shall be the sole Shareholders' Agent with
all powers hereunder.
11.9.(b) Power of Attorney. Each Shareholder, by his execution
of this Agreement, hereby constitutes and appoints the Shareholders'
Agents, jointly, his true and lawful attorney in fact, with full power
in his name and on his behalf:
(i) to act on such Shareholder's behalf according to the
terms of this Agreement, including, without limitation, to amend
this Agreement in accordance with Section 11.5 (other than any
amendment affecting the Purchase Price) or terminate this Agreement
in accordance with Section 10.1; to waive compliance with
conditions precedent to the Shareholders' obligations set forth in
Article VII; to consent to the assignment of rights under this
Agreement in accordance with Section 11.4.(a); to give and receive
notices on behalf of all the Shareholders; and to act on their
behalf in connection with any matter as to which the Shareholders
jointly and severally are an "Indemnified Party" or "Indemnifying
Party" under Article VIII hereof; all in the absolute discretion of
such Shareholders' Agents;
(ii) in general, to do all things and to perform all acts
provided for in this Agreement, including, without limitation,
executing and delivering all agreements, certificates, receipts,
instructions and other instruments required in connection
therewith.
This power of attorney, and all authority hereby conferred, is granted
subject to the interests of the other Shareholders and the Buyer hereunder
and in consideration of the mutual covenants and agreements made herein,
and shall be irrevocable and shall not be terminated by any act of any
Shareholder or by operation of law, whether by the death or incapacity of
any Shareholder or by the occurrence of any other event. Each Shareholder
agrees, jointly and severally, to hold the Shareholders' Agents free and
harmless from any and all loss, damage or liability which they, or any one
of them, may sustain as a result of any action taken in good faith
hereunder.
11.10. LTEC Guaranty. LTEC guarantees the collection by each party
hereto of any and all amounts owed to such party by Buyer under or in
connection with this Agreement.
11.11. Waiver of Rights Under 1992 Agreement. Company and each
Shareholder agree that the execution of this Agreement shall constitute a
waiver of any and all rights of Company and each Shareholder under the
1992 Agreement arising out of or caused by the execution of this Agreement
or the transactions contemplated by this Agreement.
11.12. Entire Agreement. This instrument embodies the entire
agreement between the parties hereto with respect to the transactions
contemplated herein, and there have been and are no agreements,
representations or warranties between the parties other than those set
forth or provided for herein.
11.13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.14. Headings. The headings in this Agreement are inserted for
convenience only and shall not constitute a part hereof.
IN WITNESS WHEREOF, Buyer, Company, LTEC, and each Shareholder have
caused this Agreement to be signed as of the date first written above.
SHAREHOLDERS: CAPITAL ACQUISITION CORP.
("Buyer")
COMMNET CELLULAR, INC.
By: /s/ Thomas D. Flaherty By: /s/ Frank H. Hilsabeck
Name: Thomas D. Flaherty Frank H. Hilsabeck
Title: Vice President President
THE CURTIS TELEPHONE NEBWEST CELLULAR, INC.
COMPANY, INC. ("Company")
By: /s/ Rollin A. Hill By: /s/ Thomas D. Flaherty
Name: Rollin A. Hill Name: Thomas D. Flaherty
Title: President Title: President
ELSIE MUTUAL TELEPHONE LINCOLN TELECOMMUNICATIONS
COMPANY COMPANY
("LTEC")
By: /s/ John J. Faught By: /s/ Frank H. Hilsabeck
Name: John J. Faught Frank H. Hilsabeck
Title: President President and Chief Executive Officer
HEMINGFORD COOPERATIVE
TELEPHONE COMPANY
By: /s/ Bob C. Duncan
Name: Bob C. Duncan
Title: Manager
HERSHEY COOPERATIVE TELEPHONE
COMPANY
By: /s/ Jack L. Moorhead
Name: Jack L. Moorhead
Title: President
KEYSTONE-ARTHUR TELEPHONE
COMPANY
By: /s/ William B. Hill
Name: William B. Hill
Title: Vice President and
General Manager
PHILLIPS COUNTY TELEPHONE
COMPANY
By: /s/ Donald Hewitt
Name: Donald Hewitt
Title: President of the Board
SODTOWN TELEPHONE COMPANY
By: /s/ Wayne Urwiller By: /s/ Mike Plautz
Name: Wayne Urwiller Name: Mike Plautz
Title: President Title: Secretary
STANTON TELEPHONE COMPANY
By: /s/ Bernard L. Paden
Name: Bernard L. Paden
Title: President
EXHIBIT 23
ACCOUNTANTS' CONSENT
To Board of Directors
Lincoln Telecommunications Company:
We consent to the incorporation by reference in Forms S-3 (Registration
No. 33-60633) and S-8 (Registration No. 33-39551) relating to the Lincoln
Telecommunications Company's Employee and Stockholder Dividend
Reinvestment and Stock Purchase Plan and the 1989 Stock and Incentive
Plan, respectively, of our report dated February 24, 1995, with respect to
the balance sheets of Nebraska Cellular Telephone Corporation as of
December 31, 1994 and 1993, and the related statements of earnings,
stockholders' equity and cash flows for the years ended December 31, 1994
and 1993, included in the Form 8-K of Lincoln Telecommunications Company
dated July 27, 1995.
KPMG PEAT MARWICK LLP
July 27, 1995
Lincoln, Nebraska
Exhibit 99
NEWS from Lincoln Telecommunications
Lincoln Telecommunications Completes Nebraska Cellular
Telephone Corporation Acquisition
For Immediate Release
July 13, 1995
Contact: Elaine Carpenter - (402) 436-4282
Lincoln, Nebraska-Lincoln Telecommunications (NASDAQ: LTEC)
announced that it has completed the acquisition of Nebraska Cellular
Telephone Corporation (Nebraska Cellular) effective July 13, 1995. The
shareholders of Nebraska Cellular approved the acquisition on May 2, 1995.
Lincoln Telecommunications is the cellular service provider in
Nebraska's two metropolitan service areas (MSAs), Lincoln and Omaha. It
is the owner and manager of the Lincoln MSA and a minority owner and
manager of the Omaha MSA. Lincoln Telecommunications owned 16 percent of
Nebraska Cellular prior to the acquisition.
"The Nebraska Cellular acquisition is consistent with our growth
strategy of expanding our business through selective acquisitions in
faster-growing segments of the telecommunication industry," said Frank H.
Hilsabeck, president and chief executive officer of Lincoln
Telecommunications. "It gives us the opportunity to develop a statewide
cellular network in Nebraska, providing seamless coverage from border to
border."
In the acquisition, Lincoln Telecommunications acquired Nebraska
Cellular and its statewide network of 10 rural service areas for a
combination of approximately 4.3 million shares of new Lincoln
Telecommunications common stock and $61.6 million in cash. This
acquisition increases the company's managed POPs by 828,000.
When combined with Lincoln Telecommunications' other managed
cellular operations, the company will have a wireless footprint reaching
1.75 million Nebraskans. The acquisition will increase Lincoln
Telecommunications' base of cellular subscribers by 187.1 percent.
Nebraska Cellular serves approximately 90 percent of the population of
Nebraska outside of Lincoln and Omaha. In 1994, Nebraska Cellular's
customer base grew 132.9 percent and generated revenues of $23.4 million,
up 79.3 percent from 1993.
Hilsabeck also announced that Kevin Wiley will continue to serve
as president of Nebraska Cellular. Brad Hedrick has been named vice
president-engineering and Andy Arnold has been named vice president-
operations for Nebraska Cellular.
Lincoln Telecommunications is a full-service communications
company headquartered in Lincoln, Nebraska. Through its subsidiaries, it
provides local and long-distance voice and data services, directory
services, business equipment and cellular and paging services.
