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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
WCT Communications, Inc.
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(Name of Issuer)
Common Stock, without par value
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(Title of Class of Securities)
92923M 10 2
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(CUSIP Number)
Helen A. Zamboni, Esq.
Rochester Telephone Corporation
180 South Clinton Avenue, Rochester, New York 14646
(716) 777-7315
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
November 8, 1994
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement
[x]. (A fee is not required only if the reporting person: (1) has
a previous statement on file reporting beneficial ownership of
more than five percent of the class of securities described in
Item 1; and (2) has filed no amendment subsequent thereto
reporting beneficial ownership of five percent or less of such
class.) (See Rule 13d-7.)
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*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934 ("Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
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SCHEDULE 13D
CUSIP NO. 92923M 10 2
1) Name of Reporting Persons S.S. or I.R.S. Identification Nos.
of Above Persons: Rochester Telephone Corporation
2) Check the Appropriate Box if a member of A Group (See
Instructions):
(a) [ ]
(b) [ ]
3) SEC Use Only:
4) Source of Funds (See Instructions): 00 (see item 3)
5) Check if Disclosure of Legal Proceedings is Required Pursuant
to Items 2(d) or 2(e): [ ]
6) Citizenship or Place of Organization: New York
Number of Shares Beneficially Owned by Each Reporting Person
with:
7) Sole Voting Power: 4,424,914 (The Reporting Person disclaims
beneficial ownership of these shares)
8) Shared Voting Power: -0-
9) Sole Dispositive Power: -0-
10) Shared Dispositive Power: -0-
11) Aggregate Amount Beneficially Owned by Each Reporting Person:
4,424,914 (The Reporting Person disclaims beneficial ownership of
these shares)
12) Check if the Aggregate Amount in Row (11) Excludes Certain
Shares (See Instructions): [ ]
13) Percent of Class Represented by Amount in Row (11): 30.4
14) Type of Reporting Person (See Instructions): CO
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STATEMENT PURSUANT TO RULE 13d-1
OF THE
GENERAL RULES AND REGULATIONS
UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
Item 1. Security and Issuer.
This statement on Schedule 13D (this "Schedule 13D")
relates to the Common Stock, without par value, of WCT
Communications, Inc. ("WCT"), a Washington corporation (the "WCT
Shares"). The principal executive offices of WCT are located at
135 East Ortega Street, Santa Barbara, California 93101.
Item 2. Identity and Background.
This Schedule 13D is filed by Rochester Telephone
Corporation, a New York corporation ("Rochester"). The principal
executive offices of Rochester are located at 180 South Clinton
Avenue, Rochester, New York 14646.
Rochester is a provider of integrated
telecommunications services to more than 1.5 million customers in
the Northeast, South and Midwest through its long distance, local
telephone and wireless communications operations.
Information concerning the directors and executive
officers of Rochester is contained in Schedule A attached hereto.
During the last five years, neither Rochester nor, to
the best knowledge of Rochester, any director or executive
officer of Rochester has been (i) convicted of a criminal
proceeding (excluding traffic violations or similar misdemeanors)
or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result or
such proceeding has been or is subject to a judgment, decree or
final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws
or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
As more fully described in Item 4 hereof, Rochester has
entered into a Shareholder's Agreement dated as of November 8,
1994 with Richard Frockt (the "Frockt Agreement") and a
Shareholder's Agreement dated as of November 8, 1994 with
Christopher E. Edgecomb (the "Edgecomb Agreement" and, together
with the Frockt Agreement, the "Shareholder's Agreements").
Messrs. Frockt and Edgecomb (each, a "Shareholder") entered into
their respective Shareholder's Agreements to induce Rochester and
Rochester Subsidiary Twenty-Eight, Inc., a Delaware corporation
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and a wholly-owned subsidiary of Rochester ("Sub") to enter into
the Merger Agreement described in item 4.
Item 4. Purpose of Transaction.
On November 8, 1994, Rochester, Sub and WCT entered
into an Agreement and Plan of Merger (the "Merger Agreement")
providing for the merger (the "Merger") of Sub, with and into WCT,
which shall be the surviving corporation of the Merger. At the
effective time of the Merger (the "Effective Time"), each WCT
Share outstanding immediately prior to the Effective Time shall
be converted into the right to receive $6.50 in cash, other than
any WCT Shares owned by Rochester or Sub and any WCT Shares that
are subject to dissenters' rights. The obligations of the parties
to the Merger Agreement to effect the Merger are subject to
certain conditions, and prior to the Effective Time, Rochester,
Sub or WCT may terminate the Merger Agreement under certain
circumstances, in each case as set forth in the Merger Agreement.
Concurrently with and as a condition to the execution
and delivery of the Merger Agreement, Rochester entered into the
Shareholder's Agreements. Subject to the terms and conditions of
his respective Shareholder's Agreement, each Shareholder has
agreed to vote, and has appointed Rochester as his proxy to vote,
at any meeting of WCT shareholders, the WCT Shares then held by
him (at November 8, 1994, 3,522,259 WCT Shares were held by
Frockt and 902,655 WCT Shares were held by Edgecomb), (i) in
favor of the Merger, (ii) against any action or agreement that
would result in a breach in any respect of any covenant,
representation or warranty or any other obligation or agreement
of WCT under the Merger Agreement and (iii) against any action or
agreement (other than the Merger Agreement or the transactions
contemplated thereby) that would impede, interfere with, delay,
postpone or attempt to discourage the Merger (collectively, the
"Merger Related Matters"). During the term of each Shareholder's
respective Shareholder's Agreement and subject to the conditions
contained therein, each Shareholder has agreed to refrain from
soliciting certain proposals regarding WCT, to restrictions upon
the transfer of his WCT Shares and to promptly notify Rochester
of any WCT Shares acquired by him.
In addition, the Frockt Agreement provides that
immediately prior to the consummation of the Merger that
Rochester will purchase all of the WCT Shares then owned by
Frockt for $6.00 per WCT Share in cash, subject to the waiver or
satisfaction of certain conditions.
The Shareholder's Agreements terminate on the first to
occur of (i) the Effective Time, (ii) termination of the Merger
Agreement in accordance with its terms (a "Termination"), and
(iii) written notice of termination of such agreement by
Rochester to such Shareholder. Notwithstanding the foregoing,
the Frockt Agreement provides that if any at time within nine
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months after a Termination, (i) any WCT Shares owned by Frockt
are sold, exchanged or converted in connection with a Third Party
Acquisition (as defined in the Merger Agreement) or (ii) WCT
enters into definitive agreements with respect to a Third Party
Acquisition with any person which contemplates the sale, exchange
or conversion of such shares, Frockt shall pay to Rochester an
amount, in cash, with respect to any such WCT Share, equal to the
quotient of (x)(A) the value of the consideration received by
Frockt for such WCT Share in connection with such Third Party
Acquisition less (B) $6.50, divided by (y) two, to the extent
such quotient exceeds $0 (the "Fee"). In addition, in the event
of a Termination, the Frockt Agreement also provides that
Rochester shall retain the proxy as to 1,820,285 of the WCT
Shares covered by the Frockt Agreement during the period
commencing on the date of Termination and ending six months
thereafter, and that such WCT Shares may be voted in Rochester's
sole discretion during such period.
If the Merger is completed as planned, the board of
directors of WCT will consist of the directors of Sub at the time
of the Merger. At the Effective Time, the Certificate of
Incorporation and By-Laws of Sub shall be the Articles of
Incorporation and By-Laws, of WCT (except that such Articles
shall provide that the name of the surviving corporation of the
Merger shall be "WCT Communications, Inc." and shall be amended
to the extent necessary to comply with Washington law). If the
Merger is completed as planned, Rochester expects to cause WCT to
seek to have the WCT Shares deregistered under the Exchange Act
and to cease to be quoted on the National Association of
Securities Dealers Automatic Quotation System.
The preceding summary of certain provisions of the
Merger Agreement and the Shareholder's Agreements is not intended
to be complete and is qualified in its entirely by reference to
the full text of such agreements, copies of which are filed
as Exhibits hereto and which are incorporated herein.
Other than as described above, Rochester has no plans
or proposals that relate to or would result in any of the actions
described in subparagraphs (a) through (j) of Item 4 of Schedule
13D (although subject to the provisions of the Merger Agreement
it reserves the right to develop such plans).
Item 5. Interest in Securities of the Issuer.
(a) and (b) Under the definition of "beneficial owner"
as set forth in Rule 13d-3 under the Exchange Act of 1934, as
amended (the "Exchange Act"), as of November 8, 1994, Rochester
may be deemed to have beneficially owned the 3,522,259 WCT Shares
subject to the Frockt Agreement and the 902,655 WCT Shares
subject to the Edgecomb Agreement, constituting, in the
aggregate, approximately 30.4% of the outstanding WCT Shares
(based on the number of outstanding WCT Shares represented by WCT
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in the Merger Agreement to be outstanding as of November 8,
1994). With respect to the Merger Related Matters, Rochester has
sole power to vote the 3,522,259 and 902,655 WCT Shares subject
to the Shareholder's Agreements. Moreover, in the event of a
Termination, Rochester shall have sole power to vote 1,820,285 of
the 3,522,259 WCT Shares subject to the Frockt Agreement for the
six month period commencing on the date of Termination. Neither
the filing of this Schedule 13D nor any of its contents shall be
deemed to constitute an admission that Rochester is the
beneficial owner of the WCT Shares referred to in this paragraph
for purposes of Section 13(d) of the Exchange Act or for any
other purpose, and such beneficial ownership is expressly
disclaimed.
To the best knowledge of Rochester, no director or
executive officer of Rochester beneficially owns any WCT Shares.
(c) The Shareholder's Agreements were executed as of
November 8, 1994.
(d) Rochester has no right to receive dividends from,
or the proceeds from the sale of, the WCT Shares which are
subject to the Shareholder's Agreements, except as described in
Item 4 hereof with respect to the Fee.
(e) Not applicable.
Item 6. Contracts, Arrangements or Understandings with Respect
to Securities of the Issuer
Except as described in Item 4 hereof, neither Rochester
nor, to the best knowledge of Rochester, any director or
executive officer of Rochester has any contract, arrangement,
understanding or relationship (legal or otherwise) with any
person with respect to any securities of WCT, including, but not
limited to, transfer or voting of any securities of WCT, finder's
fees, joint ventures, loan or option arrangements, puts or calls,
guarantees of profits, division of profits or loss or the giving
of withholding of proxies.
Item 7. Material to be Filed as Exhibits.
1. Agreement and Plan of Merger dated as of November 8, 1994
among Rochester, Sub and WCT.
2. Shareholder's Agreement dated as of November 8, 1994 between
Rochester and Richard Frockt.
3. Shareholder's Agreement dated as of November 8, 1994 between
Rochester and Christopher E. Edgecomb.
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SIGNATURE
After reasonably inquiry and to the best of my
knowledge and belief, I certify that the information set forth in
this Statement is true, complete and correct.
DATED: November 18, 1994
ROCHESTER TELEPHONE CORPORATION
By: /s/ Barbara J. LaVerdi
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Barbara J. LaVerdi,
Assistant Secretary
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SCHEDULE A
Set forth below is the name, business address and principal
occupation or employment of each director and executive officer
of Rochester. The name of each person who is a director of
Rochester is marked with an askerisk. Unless otherwise
indicated, the business address of each person listed below is
Rochester Telephone Corporation, 180 South Clinton Avenue,
Rochester, New York 14646. Each person listed below is a citizen
of the United States.
Princpal Occupation
Name and Business Address or Employment
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Patricia C. Barron* President, Engineering Systems
Xerox Corporation Xerox Corporation
100 Clinton Avenue South
Mail Stop X2-029
Rochester, New York 14644
Ronald L. Bittner* Chairman of the Board,
President and CEO
Rochester Telephone Corporation
John R. Block* President,
National American National American
Wholesale Grocers' Association Wholesale Grocers' Association
(NAWGA) (NAWGA)
201 Park Washington Court
Falls Church, Virginia 22046
Harlan D. Calkins* Chairman, President & CEO
Rochester Midland Corp. Rochester Midland Corp.
333 Hollenbeck Street
Rochester, New York 14621
Brenda E. Edgerton* Vice President, Finance
Campbell Soup Company - U.S. Soup
Campbell Place, Box 29-D Campbell Soup Company
Camden, New Jersey 08103-1799
Jairo A. Estrada* Chairman and CEO
Garden Way, Inc. Garden Way, Inc.
102nd & 9th Avenue
Troy, New York 12180
Daniel E. Gill* Chairman and CEO
Bausch & Lomb, Inc. Bausch & Lomb, Inc.
Lincoln First Tower, 24th Fl.
Rochester, New York 14604
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Alan C. Hasselwander* Past Chairman of the Board
Rochester Telephone Corporation
Douglas H. McCorkindale* Vice Chairman and Chief
Gannett Co., Inc. Financial and Administrative
1100 Wilson Blvd. Officer, Gannett Co., Inc.
29th Floor
Arlington, Virginia 22234
Richard P. Miller, Jr.* VP for External Affairs
University of Rochester University of Rochester
Administration Bldg., Rm. 237
Rochester, New York 14627
Dr. Leo J. Thomas* Group Vice President
Eastman Kodak Company and President, Imaging
343 State Street Eastman Kodak Company
Rochester, New York 14650
Michael T. Tomaino* Partner
Nixon, Hargrave, Devans & Doyle Nixon, Hargrave, Devans & Doyle
Clinton Square
P.O. Box 1051
Rochester, New York 14603
Jeremiah T. Carr Corporate Vice President
Rochester Telephone Corporation
Dale M. Gregory Corporate Vice President
Rochester Telephone Corporation
Louis L. Massaro Corporate Vice President
and Treasurer
Rochester Telephone Corporation
John K. Purcell Corporate Vice President
Rochester Telephone Corporation
Martin T. McCue Corporate Vice President
Rochester Telephone Corporation
Janet F. Sansone Corporate Vice President
Rochester Telephone Corporation
Josephine S. Trubek Corporate Secretary
Rochester Telephone Corporation
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
ROCHESTER TELEPHONE CORPORATION,
ROCHESTER SUBSIDIARY TWENTY-EIGHT, INC.
AND
WCT COMMUNICATIONS, INC.
THIS AGREEMENT AND PLAN OF MERGER ("Agreement") is dated as
of November 8, 1994 by and among ROCHESTER TELEPHONE CORPORATION,
a New York transportation corporation ("Rochester"), ROCHESTER
SUBSIDIARY TWENTY-EIGHT, INC., a Delaware corporation and a
wholly-owned subsidiary of Rochester ("Sub") and WCT
COMMUNICATIONS, INC., on behalf of itself and its direct and
indirect subsidiaries, a Washington corporation ("WCT").
W I T N E S S E T H :
WHEREAS, the Boards of Directors of each of WCT, Rochester
and Sub have adopted this Agreement and by appropriate
resolutions approved the merger of Sub with and into WCT (the
"Merger") and the other transactions contemplated by this
Agreement, upon the terms and conditions set forth in this
Agreement; and
WHEREAS, as a condition to their willingness to enter into
this Agreement and consummate the transactions contemplated
hereby, Rochester and Sub have required each of Richard Frockt
("Frockt") and Christopher E. Edgecomb ("Edgecomb"),
contemporaneously with the execution and delivery of this
Agreement, to execute and deliver a non-compete agreement among
Rochester, WCT and Frockt and a non-compete agreement among
Rochester, WCT and Edgecomb, respectively (together, the "Non-
Compete Agreements"); and in order to induce Rochester and Sub to
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enter into this Agreement, Frockt and Edgecomb have agreed to
execute and deliver such Non-Compete Agreements;
WHEREAS, as a further condition to their willingness to
enter into this Agreement and consummate the transactions
contemplated hereby, Rochester and Sub have required that Frockt
and Edgecomb agree to vote all of the shares of Common Stock,
without par value, of WCT (the "WCT Common Stock") owned by each
of them in accordance with the shareholder's agreements to be
executed and delivered contemporaneously with the execution and
delivery of this Agreement (together, the "Shareholder's
Agreements"); and in order to induce Rochester and Sub to enter
into this Agreement, Frockt and Edgecomb have each agreed to
execute and deliver such Shareholder's Agreements; and
WHEREAS, the consummation of the Merger pursuant to the Plan
of Merger is conditioned, among other things, upon the
fulfillment or performance on or before the Effective Time (as
hereinafter defined) of the conditions set forth in this
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending
to be legally bound hereby, Rochester, Sub and WCT hereby agree
as follows:
ARTICLE I - THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to
the conditions of this Agreement, and in accordance with the
Washington Business Corporation Act ("Washington Law") and the
Delaware General Corporation Law ("Delaware Law"), at the
Effective Time (as defined in Section 2.2), Sub shall be merged
with and into WCT. As a result of the Merger, the separate
corporate existence of Sub shall cease and WCT shall continue as
the surviving corporation of the Merger (the "Surviving
Corporation"). At Rochester's election, the Merger may
alternatively be structured so that (i) WCT is merged with and
into Rochester, Sub or any other direct or indirect subsidiary of
Rochester or (ii) any direct or indirect subsidiary of Rochester
other than Sub is merged with and into WCT. In the event of such
an election, the parties agree to execute an appropriate
amendment to this Agreement in order to reflect such election.
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SECTION 1.2 Effective Time. As soon as practicable
after the satisfaction or, if permissible, waiver of the
conditions set forth in Article VII, the parties hereto shall
cause the Merger to be consummated by delivering articles of
merger (the "Articles of Merger") to the Secretary of State of
the State of Washington and by filing this Agreement or a
certificate of merger (the "Certificate of Merger") with the
Secretary of State of the State of Delaware, in such form as
required by, and executed in accordance with the relevant
provisions of, Washington Law and Delaware Law (the date and time
of the later to occur of the filing of the Articles of Merger
with the Secretary of State of the State of Washington and the
filing of the Certificate of Merger with the Secretary of State
of the State of Delaware (or such later time as is specified in
the Articles of Merger and Certificate of Merger) being the
"Effective Time").
SECTION 1.3 Effects of the Merger. The Merger shall
have the effects set forth in the applicable provisions of
Washington Law and Delaware Law. Without limiting the generality
of the foregoing, and subject thereto, at the Effective Time all
the property, rights, privileges, immunities, powers and
franchises of WCT and Sub shall vest in the Surviving
Corporation, and all debts, liabilities and duties of WCT and Sub
shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 1.4 Articles of Incorporation; By-Laws. (a)
Unless otherwise determined by Rochester prior to the Effective
Time, the Articles of Incorporation of the Surviving Corporation
shall, as a result of the Merger, be changed so as to read in
their entirety as closely as possible to the Certificate of
Incorporation of Sub immediately prior to the Effective Time
except, (i) that at the Effective Time Article I of the Articles
of Incorporation of the Surviving Corporation shall be amended to
read in its entirety as follows: "The name of this Corporation
is 'WCT Communications, Inc.' " and (ii) in the case of a merger
where WCT is the Surviving Corporation, to the extent necessary
to comply with or conform to Washington Law, until thereafter
amended as provided by law and such Articles of Incorporation.
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(b) Unless otherwise determined by Rochester prior to the
Effective Time, the By-Laws of the Surviving Corporation shall,
as a result of the Merger, be changed so as to read in their
entirety as closely as possible to the By-Laws of Sub immediately
prior to the Effective Time except, in the case of a merger where
WCT is the Surviving Corporation, to the extent necessary to
comply with or conform to Washington Law, until thereafter
amended as provided by law, the Articles of Incorporation of the
Surviving Corporation and such By-Laws.
SECTION 1.5 Directors and Officers. The directors of
Sub immediately prior to the Effective Time shall be the initial
directors of the Surviving Corporation, each to hold office in
accordance with the Articles of Incorporation and By-Laws of the
Surviving Corporation, and the officers of WCT immediately prior
to the Effective Time shall be the initial officers of the
Surviving Corporation, in each case until their respective
successors are duly elected or appointed (as the case may be) and
qualified.
SECTION 1.6 Conversion of Securities. At the Effective
Time, by virtue of the Merger and without any action on the part
of Sub, WCT or the holders of any of the following securities:
(a) Each share of WCT Common Stock (a "Share") issued and
outstanding immediately prior to the Effective Time (other than
any Shares to be cancelled pursuant to Section 1.6(b), any
Dissenting Shares (as defined in Section 1.8(a) and Shares owned
by Sub) shall be cancelled, extinguished and converted into the
right to receive $6.50, in cash (the "Merger Consideration")
payable to the holder thereof, without interest, upon surrender
of the certificate formerly representing such Share in the manner
provided in Section 1.9, less any required withholding taxes.
(b) Each Share which is authorized but unissued immediately
prior to the Effective Time and each Share owned by Rochester or
Sub immediately prior to the Effective Time shall be cancelled
and retired without any conversion thereof and no payment or
distribution shall be made with respect thereto.
(c) Each share of common, preferred or other capital stock
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Time shall be converted into and become one validly issued, fully
paid and nonassessable share of identical common, preferred or
other capital stock of the Surviving Corporation.
SECTION 1.7 Treatment of Employee Options and Warrants.
Immediately prior to the Effective Time, each outstanding
employee and director stock option and any related stock
appreciation right (together, an "Employee Option") and each
outstanding warrant to purchase Shares (a "Warrant") whether or
not then exercisable shall be cancelled by WCT, and each holder
of a cancelled Employee Option or Warrant shall be entitled to
receive at the Effective Time or as soon as practicable
thereafter (or, if later, the date six months and one day
following the grant of an Employee Option if such delay is
required by then applicable law) from WCT in consideration for
the cancellation of such Employee Option or Warrant an amount in
cash equal to the product of (i) the number of Shares previously
subject to such Employee Option or Warrant and (ii) the excess,
if any, of the Merger Consideration over the exercise price per
Share previously subject to such Employee Option or Warrant.
SECTION 1.8 Dissenting Shares. (a) Notwithstanding any
provision of this Agreement to the contrary, Shares which are
outstanding immediately prior to the Effective Time and which are
held by holders of Shares who have properly exercised dissenters'
rights with respect to the Merger in accordance with RCW 23B.13,
et seq., ("RCW 23B.13") of Washington Law (collectively, the
"Dissenting Shares"), shall not be converted into or represent
the right to receive the Merger Consideration, but such holders
of Shares shall be entitled to receive payment of the fair value
of such Shares in accordance with the provisions of RCW 23B.13
unless and until such shareholders fail to perfect or shall have
effectively withdrawn or lost their rights to receive payment of
the fair value for such Shares under RCW 23B.13. If, after the
Effective Time, any such shareholder fails to perfect or shall
have effectively withdrawn or lost such rights, such Shares shall
thereupon be deemed to have been converted into and become
exchangeable for, at the Effective Time, the right to receive the
Merger Consideration, without any interest thereon, upon
surrender of the certificate or certificates formerly
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representing such Shares in the manner provided in Section 1.9,
less any required withholding taxes.
(b) WCT shall give Rochester (i) prompt notice of any
demands for payment pursuant to RCW 23B.13 received by WCT,
withdrawals of such demands, and any other instruments served
pursuant to Washington Law and received by WCT and (ii) the
opportunity to direct all negotiations and proceedings with
respect to demands for payment under Washington Law. WCT shall
not, except with the prior written consent of Rochester, make any
payment with respect to any such demands for payment or offer to
settle or settle any such demands.
SECTION 1.9 Surrender of Shares; Stock Transfer Books.
(a) Prior to the Effective Time, Sub shall designate a bank or
trust company to act as agent for the holders of Shares in
connection with the Merger (the "Paying Agent") to receive the
Merger Consideration to which holders of Shares shall become
entitled pursuant to Section 1.6(a) and Section 1.7. When and as
needed, Rochester or Sub will make available to the Paying Agent
sufficient funds to make all payments pursuant to Section 1.9(b).
Such funds shall be invested by the Paying Agent as directed by
Sub or, after the Effective Time, the Surviving Corporation,
provided that such investments shall be in obligations of or
guaranteed by the United States of America, in commercial paper
obligations rated A-1 or P-1 or better by Moody's Investors
Service, Inc. or Standard & Poor's Corporation, respectively, or
in certificates of deposit, bank repurchase agreements or
banker's acceptances of commercial banks with capital exceeding
$500,000,000. Any net profit resulting from, or interest or
income produced by, such investments will be payable to the
Surviving Corporation or Rochester, as Rochester directs.
(b) Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each record holder, as of
the Effective Time, of an outstanding certificate or certificates
which immediately prior to the Effective Time represented Shares
(the "Certificates"), a form of letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss
and title to the Certificates shall pass, only upon proper
delivery of the Certificates to the Paying Agent) and
instructions for use in effecting the surrender of the
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Certificates for payment of the Merger Consideration therefor.
Upon surrender to the Paying Agent of a Certificate, together
with such letter of transmittal, duly completed and validly
executed in accordance with the instructions thereto, and such
other documents as may be required pursuant to such instructions,
the holder of such Certificate shall be entitled to receive in
exchange therefor the Merger Consideration for each Share
formerly represented by such Certificate, and such Certificate
shall then be cancelled. No interest shall be paid or accrued
for the benefit of holders of the Certificates on the Merger
Consideration payable upon the surrender of the Certificates. If
payment of the Merger Consideration is to be made to a person
other than the person in whose name the surrendered Certificate
is registered, it shall be a condition of payment that the
Certificate so surrendered shall be properly endorsed or shall be
otherwise in proper form for transfer and that the person
requesting such payment shall have paid any transfer and other
taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of the
Certificate surrendered or shall have established to the
satisfaction of the Surviving Corporation that such tax either
has been paid or is not applicable.
(c) At any time following six months after the Effective
Time, the Surviving Corporation shall be entitled to require the
Paying Agent to deliver to it any funds (including any interest
received with respect thereto) which had been made available to
the Paying Agent and which have not been disbursed to holders of
Certificates, and thereafter such holders shall be entitled to
look to the Surviving Corporation (subject to abandoned property,
escheat or other similar laws) only as general creditors thereof
with respect to the Merger Consideration payable upon due
surrender of their Certificates. Notwithstanding the foregoing,
neither the Surviving Corporation nor the Paying Agent shall be
liable to any holder of a Certificate for Merger Consideration
delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(d) At the Effective Time, the stock transfer books of WCT
shall be closed and thereafter there shall be no further
registration of transfers of shares of the WCT Common Stock on
the records of WCT. From and after the Effective Time, the
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<PAGE>8
holders of Certificates evidencing ownership of Shares
outstanding immediately prior to the Effective Time shall cease
to have any rights with respect to such Shares except as
otherwise provided for herein or by applicable law.
ARTICLE II - THE CLOSING
Subject to Article VIII, the closing (the "Closing") of the
transactions contemplated by this Agreement shall take place on a
date to which Rochester and WCT may agree (the "Closing Date"),
provided that in the absence of an agreement by the parties to
the contrary the Closing shall take place at 10:00 a.m., New York
City time, on the fifth business day after the later to occur of
satisfaction or waiver of the conditions to Closing set forth in
Article VII. The Closing shall be held at the offices of
Rochester in Rochester, New York, or at such other place as to
which the parties shall agree.
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF WCT
WCT hereby represents and warrants to Rochester and Sub
that, except as set forth on Schedule 3, attached hereto and made
a part hereof:
SECTION 3.1 Organization and Qualification; Subsidiaries.
Each of WCT and each of its subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has the requisite
corporate power and authority and any necessary governmental
approvals to own, lease and operate its properties and to carry
on its business as it is now being conducted, except where the
failure to be so organized, existing and in good standing or to
have such power, authority and governmental approvals would not,
individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect (as defined below). Each of WCT and
each of its subsidiaries is duly qualified or licensed as a
foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned,
leased or operated by it or the nature of its activities makes
such qualification or licensing necessary, except for such
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<PAGE> 9
failures to be so duly qualified or licensed and in good standing
which would not, individually or in the aggregate, reasonably be
expected to either have a Material Adverse Effect or prevent the
consummation of the transactions contemplated hereby. When used
anywhere in this Agreement in connection with WCT or any of its
subsidiaries, the term "Material Adverse Effect" means any change
or effect that is or is reasonably likely to be materially
adverse to the business, assets, financial condition, or results
of operations of each of WCT , West Coast Telecommunications,
Inc. ("West Coast") and Business Telemanagement, Inc. ("BTI")
(each of West Coast and BTI being known herein as a "Significant
Subsidiary"), in each case taken as a whole as to WCT or any one
of its Significant Subsidiaries individually.
SECTION 3.2 Articles of Incorporation and By-Laws. WCT
has heretofore furnished to Rochester a complete and correct copy
of the Articles of Incorporation and the By-Laws of WCT as
currently in effect. Such Articles of Incorporation, By-Laws and
any organizational minutes of the incorporator of WCT and its
Board of Directors are in full force and effect and no other
organizational documents are applicable to or binding upon WCT.
WCT is not in violation of or in conflict with any of the
provisions of its Articles of Incorporation or By-Laws.
SECTION 3.3 Capitalization. The authorized capital stock
of WCT consists of 100,000,000 shares of the WCT Common Stock and
10,000,000 shares of Preferred Stock, without par value
(collectively, "WCT Preferred Stock"). As of November 7, 1994,
(i) 14,562,280 shares of the WCT Common Stock are issued and
outstanding, all of which were validly issued, fully paid and
nonassessable and were issued free of preemptive (or similar)
rights, (ii) no shares of the WCT Common Stock are authorized but
unissued, (iii) an aggregate of 1,008,117 shares of the WCT
Common Stock are reserved for issuance and issuable upon or
otherwise deliverable in connection with the exercise of
outstanding Employee Options issued pursuant to the Plans (as
defined in Section 3.10), and (iv) 276,000 shares of WCT Common
Stock are reserved for issuance and issuable upon or otherwise
deliverable in connection with the exercise of Warrants. No
shares of WCT Preferred Stock are issued and outstanding. Except
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<PAGE> 10
as set forth above and except as a result of the exercise of
outstanding Employee Options and Warrants as of November 7, 1994,
there are outstanding (i) no shares of capital stock or other
voting securities of WCT, (ii) no securities of WCT convertible
into or exchangeable for shares of capital stock or voting
securities of WCT, (iii) no options or other rights to acquire
from WCT, and no obligation of WCT to issue, any capital stock,
voting securities or securities convertible into or exchangeable
for capital stock or voting securities of WCT and (iv) no equity
equivalents, interests in the ownership or earnings of WCT or
other similar rights (collectively, "WCT Securities"). There are
no outstanding obligations of WCT or any of its subsidiaries to
repurchase, redeem or otherwise acquire any WCT Securities.
There are no other options, calls, warrants or other rights,
agreements, arrangements or commitments of any character relating
to the issued or unissued capital stock of WCT or any of its
subsidiaries to which WCT or any of its subsidiaries is a party.
All shares of the WCT Common Stock subject to issuance as
provided above, upon issuance on the terms and conditions
specified in the instruments pursuant to which they are issuable,
shall be duly authorized, validly issued, fully paid and
nonassessable and free of preemptive (or similar) rights. Except
as provided pursuant to Section 2.7 of this Agreement, there are
no outstanding contractual obligations of WCT or any of its
subsidiaries to repurchase, redeem or otherwise acquire any
shares of the WCT Common Stock or the capital stock of any
subsidiary or, except as described below, to provide funds to or
make any investment (in the form of a loan, capital contribution
or otherwise) in any such subsidiary or any other entity, nor has
WCT granted any guarantees for the benefit of any unrelated
entities. WCT has not adopted a shareholders' rights plan. Each
of the outstanding shares of capital stock of each of WCT's
subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and is owned free and clear of all security
interests, liens, claims, pledges, agreements, limitations in
voting rights, charges or other encumbrances of any nature
whatsoever. WCT has delivered to Rochester prior to the date
hereof a list of the subsidiaries and associated entities of WCT
which evidences, among other things, the amount of capital stock
or other equity interests owned by WCT, directly or indirectly,
<PAGE>
<PAGE>11
in such subsidiaries or associated entities. No entity in which
WCT owns, directly or indirectly, less than a 50% equity interest
is, individually or when taken together with all such other
entities, material to the business of WCT and its subsidiaries
taken as a whole.
SECTION 3.4 Authority Relative to This Agreement. WCT
has all necessary corporate power and authority to execute and
deliver this Agreement, to perform its obligations hereunder and
to consummate the transactions contemplated hereby. Upon
approval of this Agreement by the Board of Directors of WCT, this
Agreement will be duly and validly executed and delivered by WCT
and the consummation by WCT of the transactions contemplated
hereby will be duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part
of WCT will then be necessary to authorize this Agreement or to
consummate the transactions so contemplated (other than, with
respect to the Merger, the approval of this Agreement by the
holders of two-thirds of the outstanding Shares if and to the
extent required by applicable law, and the filing of appropriate
merger documents as required by Washington Law and Delaware Law).
Once this Agreement has been duly and validly executed and
delivered by WCT and, assuming the due authorization, execution
and delivery hereof by Rochester and Sub, it shall constitute a
legal, valid and binding obligation of WCT enforceable against
WCT in accordance with its terms, except that such enforceability
(i) may be limited by bankruptcy, insolvency, moratorium or other
similar laws affecting or relating to enforcement of creditors'
rights generally and (ii) is subject to general principles of
equity. The Board of Directors of WCT, at a meeting to be duly
called and held no later than 11:59 p.m., Pacific Standard Time
on November 9, 1994, will be requested by the management of WCT
unanimously (i) to determine that this Agreement and the
transactions contemplated hereby, including the Merger and the
Merger Consideration to be paid to the holders of Shares, are
fair to and in the best interests of the holders of the Shares,
(ii) to adopt this Agreement, approve each of the Shareholder's
Agreements and each of the Non-Compete Agreements and the letter
amendment to the September 2, 1994, letter confidentiality
agreement between WCT and Rochester, and approve the transactions
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<PAGE> 12
contemplated hereby and thereby and (iii) to resolve to recommend
that the shareholders of WCT vote their Shares in favor of the
Merger and approve this Agreement and the transactions
contemplated hereby, so as to render inapplicable to the
transactions contemplated hereby or thereby the limitations on
"interested shareholder transactions" contained in RCW 23B.17.020
of Washington Law. As a result of the foregoing actions, once
taken, the only vote required to authorize the Merger is the
affirmative vote of two-thirds of the outstanding Shares. In
addition, once such actions have been taken, neither RCW
23B.19.101, et seq., of Washington Law nor any similar provision
shall be applicable to the transactions contemplated hereby or
thereby.
SECTION 3.5 No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this Agreement by
WCT do not and will not: (i) conflict with or violate the
Articles of Incorporation or By-Laws of WCT or the equivalent
organizational documents of any of its Significant Subsidiaries;
(ii) assuming that all consents, approvals and authorizations
contemplated by subsection (b) below have been obtained and all
filings described in such subsection have been made, conflict
with or violate any law, rule, regulation, order, judgment or
decree applicable to WCT or any of its Significant Subsidiaries
or by which its or any of their respective properties are bound
or affected; or (iii) result in any breach or violation of or
constitute a default (or an event which with notice or lapse of
time or both could become a default) or result in the loss of a
material benefit under, or give rise to any right of termination,
amendment, acceleration or cancellation of, or result in the
creation of a lien or encumbrance on any of the properties or
assets of WCT or any of its Significant Subsidiaries pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to
which WCT or any of its Significant Subsidiaries is a party or by
which WCT or any of its Significant Subsidiaries or its or any of
their respective properties are bound or affected, except, in the
case of clauses (ii) and (iii), for such conflicts, violations,
breaches, defaults or other occurrences which would not,
individually or in the aggregate, reasonably be expected to
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<PAGE> 13
prevent or materially delay the consummation of the Merger (any
of such effects being known as "Prevention Effect") or which
would cause a Material Adverse Effect.
(b) The execution, delivery and performance of this
Agreement by WCT and the consummation of the Merger by WCT do not
and will not require any consent, approval, authorization or
permit of, action by, filing with or notification to, any
governmental or regulatory authority, domestic or foreign, except
for (i) applicable requirements, if any, of the Exchange Act, the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), state securities, takeover and Blue Sky laws,
the Federal Communications Act of 1934, as amended, and state
utility or telecommunication regulatory laws, (ii) the filing and
recordation of appropriate merger or other documents as required
by Washington Law and Delaware Law, and (iii) such consents,
approvals, authorizations, permits, actions, filings or
notifications the failure of which to make or obtain would not
reasonably be expected to (x) cause a Prevention Effect or a
Material Adverse Effect or (y) otherwise prevent or delay WCT
from performing its obligations under this Agreement.
SECTION 3.6 Compliance. Neither WCT nor any of its
Significant Subsidiaries is in conflict with, or in default or
violation of, the conflict, default or violation of which would
have a Material Adverse Effect, (i) any law, rule, regulation,
order, judgment or decree applicable to WCT or any of its
Significant Subsidiaries or by which its or any of their
respective properties are bound or affected, or (ii) any note,
bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which WCT
or any of its Significant Subsidiaries is a party or by which WCT
or any of its Significant Subsidiaries or its or any of their
respective properties are bound or affected.
SECTION 3.7 SEC Filings; Financial Statements. (a) WCT
and, to the extent applicable, each of its then or current
subsidiaries, has filed all forms, reports, statements and
documents required to be filed with the SEC (collectively, the
"SEC Reports"), each of which has complied in all material
respects with the applicable requirements of the Securities Act
<PAGE>
<PAGE> 14
of 1933, as amended (the "Securities Act"), or the Exchange Act,
each as in effect on the date so filed. WCT has heretofore
delivered or promptly will deliver to Rochester, in the form
filed or to be filed with the SEC (including any amendments
thereto), (i) its (and, to the extent applicable, its
subsidiaries') Annual Reports on Form 10-K for each of the three
fiscal years ended May 31, 1992, the period ended June 30, 1992
and the two fiscal years ended June 30, 1993 and 1994 and its
Quarterly Reports on Form 10-Q for each of the quarterly periods
ended December 31, 1993, March 31, 1994 and September 30, 1994
and ending December 31, 1994 and thereafter, (ii) all definitive
proxy statements relating to WCT's (and such subsidiaries')
meetings of shareholders (whether annual or special) and (iii)
all other reports or registration statements filed by WCT (and
such subsidiaries) with the SEC. None of such forms, reports or
documents (including but not limited to any financial statements
or schedules included or incorporated by reference therein) filed
by WCT and its then or current subsidiaries contained, when
filed, any untrue statement of a material fact or omitted to
state a material fact required to be stated or incorporated by
reference therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were
made, not misleading. Except to the extent revised or superseded
by a subsequent filing with the SEC (a copy of which has been
provided to Rochester prior to the date hereof), none of the SEC
Reports filed by WCT prior to the date hereof contains any untrue
statement of a material fact or omits to state a material fact
required to be stated or incorporated by reference therein or
necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(b) Each of the audited and unaudited consolidated interim
financial statements of WCT (including, in each case, any related
notes thereto) included or to be included in its Annual Reports
on Form 10-K for each of the three fiscal years ended May 31,
1992 and June 30, 1993 and 1994 and the period ended June 30,
1992 and in its Quarterly Reports on Form 10-Q for its fiscal
quarters ended September 30, 1993, December 31, 1993, March 31,
1994 and September 30, 1994, and ending December 31, 1994 and
thereafter, which have previously been or will be furnished to
Rochester, has been or will be prepared in accordance with
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<PAGE> 15
generally accepted accounting principles applied on a consistent
basis throughout the periods involved (except as may be indicated
in the notes thereto) and each fairly presents or will present
the consolidated financial position of WCT and its subsidiaries
at the respective dates thereof and the consolidated results of
its operations and changes in cash flows for the periods
indicated, except that the unaudited interim financial statements
are subject to normal and recurring year-end adjustments.
(c) Except as and to the extent set forth on the
consolidated balance sheet of WCT and its subsidiaries at June
30, 1994, neither WCT nor any of its subsidiaries has any
liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) which would be required to be
reflected on a balance sheet or in the notes thereto prepared in
accordance with generally accepted accounting principles, except
for liabilities or obligations incurred in the ordinary course of
business since June 30, 1994 which would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect.
(d) The accounts, notes and other receivables, whether
current or non-current, of each of WCT and each of its
subsidiaries shown on the most recent consolidated balance sheets
delivered to Rochester prior to the date hereof were generated in
the ordinary course. To the knowledge of WCT, the reserves in
the consolidated balance sheets of WCT for doubtful accounts are
adequate.
(e) WCT has heretofore furnished to Rochester a complete
and correct copy of any amendments or modifications, which have
not yet been filed with the SEC, to agreements, documents or
other instruments which previously had been filed by WCT with the
SEC pursuant to the Securities Act or the Exchange Act.
SECTION 3.8 Absence of Certain Changes or Events. Since
June 30, 1994, except as set forth on Schedule 3 attached hereto
and made a part hereof or contemplated by this Agreement or
disclosed in the SEC Reports filed since that date and up to the
date of this Agreement, WCT and each of its subsidiaries has
conducted its businesses only in the ordinary course and in a
manner consistent with past practice and, since such date, there
has not been (i) any condition, event or occurrence which,
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<PAGE> 16
individually or in the aggregate, has had, or would reasonably be
expected to have, a Material Adverse Effect or prevent or delay
WCT from performing its obligations under this Agreement, (ii)
any change by WCT in its accounting methods, principles or
practices, (iii) any revaluation by WCT of any of its material
assets, including but not limited to writing down the value of
inventory or writing off notes or accounts receivable other than
in the ordinary course of business, (iv) any entry by WCT or any
of its subsidiaries into any commitment or transactions material
to WCT or to any one of its Significant Subsidiaries, taken as a
whole as to any one of WCT or any one of its Significant
Subsidiaries, (v) any declaration, setting aside or payment of
any dividends or distributions in respect of the Shares or any
redemption, purchase or other acquisition of any of its
securities, or (vi) any increase in or establishment of any
bonus, insurance, severance, deferred compensation, pension,
retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation
rights, performance awards, or restricted stock awards), stock
purchase or other employee benefit plan or agreement or
arrangement, or any other increase in the compensation payable or
to become payable to any officers or employees compensated in
excess of $100,000 per year of WCT or any of its subsidiaries,
except in the ordinary course of business and consistent with
past practice.
SECTION 3.9 Absence of Litigation. Except as disclosed
on Schedule 3 attached hereto and made a part hereof or with
reasonable specificity in the SEC Reports filed prior to the date
of this Agreement, there is no suit, claim, action, proceeding or
investigation pending or, to the knowledge of WCT, threatened, in
writing, against WCT or any of its subsidiaries, or any
properties or rights of WCT or any of its subsidiaries, before
any court, arbitrator or administrative, governmental or
regulatory authority or body, domestic or foreign in which the
amount in controversy exceeds $50,000 or seeks materially to
delay or prevent the consummation of the transactions
contemplated hereby. As of the date hereof, neither WCT nor any
of its subsidiaries nor any of their respective properties is or
are subject to any order, writ, judgment, injunction, decree,
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<PAGE> 17
determination or award of any court or any federal, state,
municipal or other governmental department, commission, board,
agency or instrumentality, domestic or foreign.
SECTION 3.10 Employee Benefits; Labor. (a) WCT
maintains no employee benefit plans, programs and arrangements,
whether or not subject to ERISA (other than welfare plans (within
the meaning of Section 3(l) of ERISA)) and the WCT Nonqualified
Stock Option Plan and the WCT Incentive Stock Option Plan
(collectively the "Option Plans"). None of the Plans promises or
provides retiree medical or life insurance benefits. Each Plan
has been operated in all respects in accordance with its terms
and the requirements of applicable law, except to the extent that
such violation would not have a Material Adverse Effect. All
insurance premiums to the extent then due and payable with
respect to the Plans as of the Effective Time have been paid or
will be paid prior thereto and adequate reserves have been
provided for on WCT's balance sheet for any premiums attributable
to service on or prior to the Effective Time. No Plan (other
than the Option Plans) contains a provision which could result in
the payment to any employee of any money, property or other
rights (or which could accelerate or provide money, property or
other rights) because of the execution of this Agreement or the
consummation of the Merger. No event or condition exists which
could result in any liability to WCT under Sections 4069 or
4212(c) of ERISA or as a result of any employee benefit plan
(within the meaning of Section 3(3) of ERISA) sponsored by any
member of its Control Group, which liability would have a
Material Adverse Effect.
(b) None of WCT or any of its subsidiaries is a party to
any collective bargaining agreement nor is any such contract
being negotiated with WCT or any of its subsidiaries. There is
no unfair labor practice charge or, to the knowledge of WCT,
unfair labor practice complaint pending or threatened, with
regard to any employees of WCT or its subsidiaries. There is no
labor strike, slowdown, work stoppage, or lockout in effect,
threatened against or otherwise affecting WCT or its subsidiaries
and WCT has not experienced any such labor controversy. No
representation question exists or has been raised respecting
employees of WCT or its subsidiaries, nor to the knowledge of WCT
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<PAGE> 18
are there any campaigns being conducted to solicit cards from the
employees of WCT or any subsidiary to authorize representation by
any labor organization. None of WCT or any of its subsidiaries
is party to, or otherwise bound by, any consent decree with, or,
to the knowledge of WCT, citation by, any governmental authority
relating to any of their employees or employment practices.
SECTION 3.11 Tax Matters. WCT and each of its
subsidiaries, and any consolidated, combined, unitary or
aggregate group for Tax purposes of which WCT or any of its
subsidiaries is or has been a member has timely filed all Tax
Returns required to be filed by it, has paid all Taxes shown
thereon to be due and has provided adequate reserves in
accordance with generally accepted accounting principles in its
financial statements for any Taxes that have not been paid, and
as to which no returns are yet due. None of WCT or any of its
subsidiaries is currently being audited or has received any
notice of an impending audit with respect to Taxes or Tax
Returns. As used herein, "Taxes" shall mean any taxes of any
kind, including but not limited to those on or measured by or
referred to as income, gross receipts, sales, use, ad valorem,
franchise, profits, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, value added,
property or windfall profits taxes, customs, duties or similar
fees, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or
additional amounts imposed by any governmental authority,
domestic or foreign. As used herein, "Tax Return" shall mean any
return, report or statement required to be filed with any
governmental authority with respect to Taxes.
SECTION 3.12 Environmental Matters. Except to the extent
that the inaccuracy of any of the following (or the circumstances
giving rise to such inaccuracy), individually or in the
aggregate, would not reasonably be expected to have a Material
Adverse Effect (after taking into account any reserves therefor
reflected in the most recent financial statements included in the
SEC Reports filed prior to the date hereof):
(a) WCT and its subsidiaries hold, and are in compliance
with, all Environmental Permits, and WCT and its subsidiaries are
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<PAGE> 19
in compliance with all applicable Environmental Laws;
(b) None of WCT or its subsidiaries has received, nor to
the knowledge of WCT is there threatened, any Environmental
Claim, nor are there any circumstances, conditions or events that
would reasonably be expected to give rise to any Environmental
Claim against WCT or any of its subsidiaries;
(c) None of WCT or its subsidiaries has entered into or
agreed to any consent decree or order under any Environmental
Law, and none of WCT or its subsidiaries is the subject of any
pending or, to the knowledge of WCT, threatened judgment, decree,
order or other requirement of any governmental authority or
private party relating to compliance with any Environmental Law
or to investigation, cleanup, remediation or removal of regulated
substances under any Environmental Law;
(d) There are no (i) underground storage tanks, (ii)
polychlorinated biphenyls, (iii) asbestos or asbestos-containing
materials or (iv) Hazardous Materials present at any facility
currently owned, leased or operated by WCT or any of its
subsidiaries that could reasonably be expected to give rise to
liability of WCT or any of its subsidiaries under any
Environmental Laws or otherwise result in any cost or expense to
WCT or any of its subsidiaries; and
(e) There are no past (including, without limitation, with
respect to assets or businesses formerly owned, leased or
operated by WCT or any of its subsidiaries) or present actions,
activities, events, conditions or circumstances, including
without limitation the release, threatened release, emission,
discharge, generation, treatment, storage or disposal of
Hazardous Materials by WCT or any of its subsidiaries, that would
reasonably be expected to give rise to liability of WCT or any of
its subsidiaries under any Environmental Laws or any contract or
agreement relating to Environmental Claims.
For purposes of this Agreement, the following terms
shall have the following meanings:
"Environmental Claim" means any written or oral notice,
claim, demand, action, suit, complaint, proceeding or other
communication by any person alleging liability or potential
liability (including without limitation liability or
potential liability for emergency actions, investigatory
costs, cleanup costs, governmental response costs, natural <PAGE>
<PAGE> 20
resource damages, property damage, personal injury, fines or
penalties) arising out of, relating to, based on or resulting
from (i) the presence, discharge, emission, release or threatened
release of any Hazardous Materials at any location, whether or
not owned, leased or operated by WCT or any of its subsidiaries,
or (ii) circumstances forming the basis of any violation or
alleged violation of any Environmental Law or Environmental
Permit.
"Environmental Permits" means all permits, licenses,
registrations and other governmental authorizations required
for WCT and the operations of WCT's and its subsidiaries'
facilities, and otherwise to conduct their respective
businesses under Environmental Laws.
"Environmental Laws" means all applicable federal,
state and local statutes, rules, regulations, ordinances,
orders, decrees and common law relating in any manner to
contamination, pollution or protection of human health or
the environment, including without limitation the
Comprehensive Environmental Response, Compensation and
Liability Act, the Solid Waste Disposal Act, the Resource
Conservation and Recovery Act, the Clean Air Act, the Clean
Water Act, the Toxic Substances Control Act, the
Occupational Safety and Health Act, the Emergency Planning
and Community-Right-to-Know Act, the Safe Drinking Water
Act, all as amended, and similar state laws.
"Hazardous Materials" means all hazardous or toxic
substances, wastes, materials or chemicals, petroleum
(including crude oil or any fraction thereof) and petroleum
products, asbestos and asbestos-containing materials,
pollutants, contaminants and all other materials and
substances regulated pursuant to any Environmental Law.
SECTION 3.13 Intellectual Property. None of WCT or any
of its subsidiaries has received any written notice, nor do any
of them have any knowledge that: WCT and each of its
subsidiaries does not own, or is not duly licensed to use (in
each case, clear of any liens or encumbrances of any kind), all
Intellectual Property used in or necessary for the conduct of its
business as currently conducted; the use of any Intellectual
Property by WCT and its subsidiaries infringes on or otherwise <PAGE>
<PAGE> 21
violates the rights of any person; any product or service (or
component thereof or process) used or sold by and/or for, or
supplied to, WCT and each of its subsidiaries infringes or
otherwise violates the Intellectual Property of any other person;
or any person is challenging, infringing on or otherwise
violating any right of WCT or any of its subsidiaries with
respect to any Intellectual Property owned by and/or licensed to
WCT and its subsidiaries. For purposes of this Agreement,
"Intellectual Property" shall mean computer software and
firmware; trademarks, service marks, brand names, certification
marks, trade dress, assumed names, trade names and other
indications of origin, the goodwill associated with the foregoing
and registrations in any jurisdiction of, and applications in any
jurisdiction to register, the foregoing, including any extension,
modification or renewal of any such registration or application;
inventions, discoveries and ideas, whether patentable or not in
any jurisdiction; patents, applications for patents (including,
without limitation, divisions, continuations, continuations in
part and renewal applications), and any renewals, extensions or
reissues thereof, in any jurisdiction; non-public information,
trade secrets and confidential information and rights in any
jurisdiction to limit the use or disclosure thereof by any
person; writings and other works, whether copyrightable or not in
any jurisdiction; registrations or applications for registration
of copyrights in any jurisdiction, and any renewals or extensions
thereof; any similar intellectual property or proprietary rights;
and any claims or causes of action arising out of or related to
any infringement or misappropriation of any of the foregoing.
SECTION 3.14 Proxy Statement. Neither the proxy
statement to be sent to the shareholders of WCT in connection
with the Shareholders Meeting (as defined in Section 6.1) or the
information statement to be sent to such shareholders, as
appropriate (such proxy statement or information statement, as
amended or supplemented, is herein referred to as the "Proxy
Statement"), shall, at the date the Proxy Statement (or any
amendment thereof or supplement thereto) is first mailed to
shareholders, at the time of the Shareholders Meeting or at the
Effective Time, contain any statement which, at such time and in
light of the circumstances under which it shall be made, is false <PAGE>
<PAGE> 22
or misleading with respect to any material fact, or shall omit to
state any material fact required to be stated therein or
necessary in order to make the statements made therein, in the
light of the circumstances under which they are made, not
misleading or necessary to correct any statement in any earlier
communication with respect to the solicitation of proxies for the
Shareholders Meeting which has become false or misleading.
Notwithstanding the foregoing, WCT makes no representation or
warranty with respect to any information supplied by Rochester or
Sub or any of their respective representatives which is contained
in the Proxy Statement. The Proxy Statement will comply in all
material respects as to form with the requirements of the
Exchange Act and the rules and regulations thereunder. If at any
time prior to the Effective Time any event or circumstance
relating to WCT or any of its subsidiaries, or any of their
respective officers or directors, shall be discovered by WCT
which should be set forth in an amendment or supplement to the
Proxy Statement, WCT shall promptly notify Rochester of that
fact, amend or supplement the Proxy Statement to reflect such
fact, and provide Rochester a copy of such amendment or
supplement.
SECTION 3.15 Brokers. No broker, finder or investment
banker (other than the Financial Adviser) is entitled to any
brokerage, finder's or other fee or commission in connection with
the transactions contemplated by this Agreement based upon
arrangements made by and on behalf of WCT. WCT has heretofore
furnished to Rochester a complete and correct copy of all
agreements between WCT and the Financial Adviser pursuant to
which such firm would be entitled to any payment relating to the
transactions contemplated hereby.
SECTION 3.16 Billing Practices. WCT and its subsidiaries
bill their customers for domestic service (except for calls
originated through operator services) at time point 6 to time
point 7, unless otherwise specified in a written contract, except
as would not have a Material Adverse Effect. In no event is the
bill duration of a call greater than time point 1 to time point
7. Rounding practices employed by WCT and its subsidiaries are
substantially consistent with industry practices.
<PAGE>
<PAGE> 23
ARTICLE IV - REPRESENTATIONS AND WARRANTIES OF
ROCHESTER AND SUB
Rochester and Sub hereby, jointly and severally, represent
and warrant to WCT that:
SECTION 4.1 Corporate Organization. (a) Rochester is a
corporation duly organized, validly existing and in good standing
under the laws of the State of New York and has the requisite
corporate power and authority and any necessary governmental
authority to own, operate or lease its properties and to carry on
its business as it is now being conducted, except where the
failure to be so organized, existing and in good standing or to
have such power, authority and governmental approvals would not,
individually or in the aggregate, reasonably be expected to cause
a Prevention Effect.
(b) Sub is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and
has the requisite corporate power and authority and any necessary
governmental authority to own, operate or lease its properties
and to carry on its business as it is now being conducted, except
where the failure to be so organized, existing and in good
standing or to have such power, authority and governmental
approvals would not, individually or in the aggregate, reasonably
be expected to cause a Prevention Effect.
SECTION 4.2 Authority Relative to This Agreement.
Rochester and Sub have all necessary corporate power to execute
and deliver this Agreement, to perform their obligations
hereunder and to consummate the transactions contemplated hereby.
Upon approval of this Agreement by the Board of Directors of
Rochester, this Agreement will be duly and validly executed and
delivered by Rochester and Sub and the consummation by Rochester
and Sub of the transactions contemplated hereby will be duly and
validly authorized by all necessary corporate action and no other
corporate proceedings on the part of Rochester and Sub will then
be necessary to authorize this Agreement or to consummate the
transactions so contemplated (other than, with respect to the
Merger, the approval of this Agreement by the holders of two-
thirds of the outstanding Shares if and to the extent required by
the applicable law, and the filing of the appropriate merger <PAGE>
<PAGE> 24
documents as required by Washington Law and Delaware Law). Once
this Agreement has been duly and validly executed and delivered
by Rochester and Sub (which shall occur on or before 11:59 p.m.,
Pacific Standard Time, on November 9, 1994) and, assuming the due
authorization, execution and delivery hereof by WCT, it shall
constitute a legal, valid and binding obligation of each such
corporation enforceable against such corporation in accordance
with its terms, except that such enforceability (i) may be
limited by bankruptcy, insolvency, moratorium or other similar
laws affecting or relating to enforcement of creditors' rights
generally and (ii) is subject to general principles of equity.
SECTION 4.3 No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance of this
Agreement by Rochester and Sub do not and will not: (i) conflict
with or violate the respective certificates of incorporation or
by-laws of Rochester or Sub; (ii) assuming that all consents,
approvals and authorizations contemplated by subsection (b) below
have been obtained and all filings described in such subsection
have been made, conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to Rochester or
Sub or by which either of them or their respective properties are
bound or affected; or (iii) result in any breach or violation of
or constitute a default (or an event which with notice or lapse
of time or both could become a default) or result in the loss of
a material benefit under, or give rise to any right of
termination, amendment, acceleration or cancellation of, or
result in the creation of a lien or encumbrance on any of the
property or assets of Rochester or Sub pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which
Rochester or Sub is a party or by which Rochester or Sub or any
of their respective properties are bound or affected, except, in
the case of clauses (ii) and (iii), for any such conflicts,
violations, breaches, defaults or other occurrences which would
not, individually or in the aggregate, reasonably be expected to
cause a Prevention Effect.
(b) The execution, delivery and performance of this
Agreement by Rochester and Sub do not and will not require any
consent, approval, authorization or permit of, action by, filing
<PAGE>
<PAGE> 25
with or notification to, any governmental or regulatory
authority, domestic or foreign, except for (i) applicable
requirements, if any, of the laws referred to in clause (i) of
the exception to Section 3.5(b)(i); (ii) the New York State
Public Service Commission (the "NYPSC"), if then required; (iii)
the filing and recordation of appropriate merger or other
documents as required by Washington Law and Delaware Law; and
(iv) such consents, approvals, authorizations, permits, actions,
filings or notifications the failure of which to make or obtain
would not, individually or in the aggregate, reasonably be
expected to cause a Prevention Effect.
SECTION 4.4 Proxy Statement. The information supplied
by Rochester for inclusion in the Proxy Statement shall not, on
the date the Proxy Statement is first mailed to shareholders, at
the time of the Shareholders Meeting (as defined in Section 6.1)
or at the Effective Time, contain any statement which, at such
time and in light of the circumstances under which it shall be
made, is false or misleading with respect to any material fact,
or shall omit to state a material fact required to be stated
therein or necessary in order to make the statements made
therein, in light of the circumstances under which they are made,
not false or misleading or necessary to correct any statement in
any earlier communication with respect to the solicitation of
proxies for the Shareholders Meeting which has become false or
misleading. Notwithstanding the foregoing, Rochester and Sub
make no representation or warranty with respect to any
information supplied by WCT or any of its representatives which
is contained in any of the foregoing documents.
SECTION 4.5 Absence of Litigation. There is no suit,
claim, action, proceeding or investigation pending or to the
knowledge of Rochester or Sub, threatened, in writing, against
Rochester or Sub which could cause a Prevention Effect.
SECTION 4.6 Brokers. No broker, finder or investment
banker (other than Lazard Freres & Co.) is entitled to any
brokerage, finder's or other fee or commission in connection with
the transactions contemplated by this Agreement based upon
arrangements made by and on behalf of Rochester or Sub.
<PAGE>
<PAGE> 26
ARTICLE V - CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1 Conduct of Business of WCT Pending the
Merger. WCT covenants and agrees that, during the period from
the date hereof to the Effective Time, except pursuant to the
terms hereof or as disclosed with reasonable specificity in the
SEC Reports filed prior to the date hereof, on Schedule 5,
attached hereto and made a part hereof, or unless Rochester shall
otherwise agree in writing, the businesses of WCT and its
subsidiaries shall be conducted only in, and WCT shall not take
any action and its subsidiaries shall not take any action except
in the ordinary course of business and in a manner consistent
with past practice and in compliance with applicable laws; and
WCT and its subsidiaries shall each use its reasonable best
efforts (i) to preserve substantially intact the business
organization of WCT and its subsidiaries, (ii) to keep available
the services of the present officers, employees and consultants
of WCT and its subsidiaries and (iii) to preserve the present
relationships of WCT and its subsidiaries with customers,
suppliers and other persons with which WCT or any of its
subsidiaries has significant business relations. By way of
amplification and not limitation, neither WCT nor any of its
subsidiaries shall, between the date of this Agreement and the
Effective Time, directly or indirectly do, or propose or commit
to do, any of the following, except as contemplated by this
Agreement or as previously disclosed with reasonable specificity
in the SEC Reports filed prior to the date hereof, or except in
the ordinary course of business and in a manner consistent with
past practice and in compliance with applicable laws, without the
prior written consent of Rochester, such consent not to be
unreasonably withheld or delayed:
(a) Amend or otherwise change its Articles of Incorporation
or By-Laws or equivalent organizational documents;
(b) Issue, deliver, sell, pledge, dispose of or encumber,
or authorize or commit to the issuance, sale, pledge, disposition
or encumbrance of, (i) any shares of capital stock of any class,
or any options, warrants, convertible securities or other rights
of any kind to acquire any shares of capital stock, or any other
ownership interest (including but not limited to stock
appreciation rights or phantom stock), of WCT or any of its <PAGE>
<PAGE> 27
subsidiaries (except for the issuance of shares of the WCT Common
Stock issuable in accordance with the terms of outstanding
Employee Options or Warrants outstanding as of November 7, 1994)
or (ii) any assets of WCT or any of its subsidiaries, except for
sales of services and products in the ordinary course of business
and in a manner consistent with past practice;
(c) Declare, set aside, make or pay any dividend or other
distribution, payable in cash, stock, property or otherwise, with
respect to any of its capital stock;
(d) Reclassify, combine, split, subdivide or redeem,
purchase or otherwise acquire, directly or indirectly, any of its
capital stock;
(e) (i) Acquire (by merger, consolidation, or acquisition
of stock or assets) any corporation, partnership or other
business organization or division thereof, (ii) incur any
obligation for borrowed money, long term or short term debt (as
defined in accordance with generally accepted accounting
principles) or issue any debt securities having a maturity of any
duration other than as shown on Schedule 5 attached hereto and
made a part hereof, which shall total no more, in the aggregate,
than $38,700,000, or assume, guarantee or endorse, or otherwise
as an accommodation become responsible for, the obligations of
any person, or make any loans, advances or capital contributions
to, or investments in, any other person; (iii) enter into any
employment contract or agreement or any other contract or
agreement other than in the ordinary course of business
consistent with past practice; or (iv) enter into or amend any
contract, agreement, commitment or arrangement with respect to
any of the matters set forth in this Section 5.1(e);
(f) Except as set forth on Schedule 3, as previously
approved by Rochester or to the extent required under existing
employee and director benefit plans, agreements or arrangements
as in effect on the date of this Agreement, increase the
compensation or fringe benefits of any of its directors, officers
or employees, except for increases in salary or wages of
employees of WCT or its subsidiaries who are not officers or
directors of WCT in the ordinary course of business in accordance
with past practice, or grant any severance or termination pay not
currently required to be paid under existing severance plans to,
or enter into any employment, consulting or severance agreement <PAGE>
<PAGE> 28
with any present or former director, officer or other employee of
WCT or any of its subsidiaries (other than an agreement entered
into in exchange for a release by an employee who is not an
officer or director, of any and all claims against WCT following
such employee's termination of employment, but only if the
aggregate amount payable to any terminated employee under any
such agreement does not exceed $100,000 and the aggregate amount
payable pursuant to all such agreements does not exceed
$1,000,000), or establish, adopt, enter into or amend or
terminate any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension,
retirement, deferred compensation, employment, termination,
severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any directors, officers or
employees, or grant any stock options or stock-based compensation
to any directors, officers or employees;
(g) Except as may be required as a result of a change in
law or in generally accepted accounting principles, change any of
the accounting practices or principles used by it;
(h) Make any tax election or settle or compromise any
material federal, state, local or foreign tax liability;
(i) Take any action, including but not limited to
introducing a new service or product, which, in the good faith
judgment of WCT, is reasonably likely to result in any claim
that WCT has violated applicable laws, rules or regulations or
any rights of any other person;
(j) Adopt a plan of complete or partial liquidation,
dissolution, merger, consolidation, restructuring,
recapitalization or other reorganization of WCT or any of its
subsidiaries not constituting an inactive subsidiary (other than
the Merger);
(k) Pay, discharge, satisfy or settle any claims, actions,
suits, liabilities or obligations (absolute, accrued, asserted or
unasserted, contingent or otherwise), other than the payment,
discharge, satisfaction or settlement (i) of actions involving
less than $100,000 which also involve no form of injunctive
relief, (ii) in the ordinary course of business and consistent
with past practice of liabilities reflected or reserved against
in the financial statements of WCT or (iii) incurred in the
ordinary course of business and consistent with past practice; or
<PAGE>
<PAGE> 29
(l) Take, or offer or propose to take, or agree to take in
writing or otherwise, any of the actions described in Sections
5.1(a) through 5.1(k) or any action which would make any of the
representations or warranties of WCT contained in this Agreement
untrue and incorrect as of the date when made if such action had
then been taken.
SECTION 5.2 Network Transition. Notwithstanding the
above, and to the extent not violative of any contracts,
arrangements or agreements, written or oral, to which any party
hereto or any of its subsidiaries or affiliates is a party, WCT
shall cause each of its subsidiaries and Rochester shall cause
each of its long distance subsidiaries ("RCI") to take the
actions reasonably necessary to begin to transition their
respective switched long distance traffic of each other for
termination, provided that the aggregate rates charged by one to
the other therefor are comparable to those then paid by WCT and
its subsidiaries and RCI, in the aggregate, to interexchange
carriers unaffiliated with either WCT or RCI for termination in
the areas served by the networks of WCT, its subsidiaries and
RCI. In addition, WCT shall assist RCI in any network
optimization and other synergistic issues identified by RCI as
necessary for RCI's future business plans.
ARTICLE VI - ADDITIONAL AGREEMENTS
SECTION 6.1 Shareholders Meeting. WCT, acting through
its Board of Directors, shall (i) duly call, give notice of,
convene and hold a special meeting of its shareholders as soon as
practicable for the purpose of considering and taking action on
this Agreement and the transactions contemplated hereby (the
"Shareholders Meeting") and (ii) subject to its fiduciary duties
under applicable law, exercised after consultation with
independent legal counsel, (A) include in the Proxy Statement the
unanimous recommendation of the Board of Directors that the
shareholders of WCT vote in favor of the approval of this
Agreement and the transactions contemplated hereby and the
written opinion of the Financial Adviser that the Merger
Consideration to be received by the shareholders of WCT is fair
to such shareholders and (B) use its reasonable best efforts to <PAGE>
<PAGE> 30
obtain the necessary approval of this Agreement and the
transactions contemplated hereby by its shareholders.
SECTION 6.2 Proxy Statement. As soon as practicable
following execution of this Agreement, WCT shall file with the
SEC under the Exchange Act, and shall use its reasonable best
efforts to have cleared by the SEC, the Proxy Statement with
respect to the Shareholders Meeting. Rochester, Sub and WCT will
cooperate with each other in the preparation of the Proxy
Statement; without limiting the generality of the foregoing, each
of Rochester and Sub will furnish to WCT the information relating
to it required by the Exchange Act to be set forth in the Proxy
Statement. WCT agrees to use its reasonable best efforts, after
consultation with the other parties hereto, to respond promptly
to any comments made by the SEC with respect to the Proxy
Statement and any preliminary version thereof filed by it and
cause such Proxy Statement to be mailed to WCT's shareholders at
the earliest practicable time.
SECTION 6.3 Access to Information; Confidentiality. (a)
From the date hereof to the Effective Time, WCT shall, and shall
cause its subsidiaries, officers, directors, employees, auditors
and other agents to, afford the officers, employees, auditors and
other agents of Rochester, and financing sources who shall agree
to be bound by the provisions of this Section 6.3 as though a
party hereto, complete access at all reasonable times to its
officers, employees, agents, properties, offices, plants and
other facilities and to all books and records, and shall furnish
Rochester and such financing sources with all financial,
operating and other data and information as Rochester, through
its officers, employees or agents, or such financing sources may
from time to time request, including such access as may be
reasonably required by Rochester and Deloitte & Touche LLP to
conduct (at Rochester's sole expense) an audit of WCT's financial
statements ("Audit"). The Audit shall be conducted as of
December 31, 1994, and completed on or before February 15, 1995;
provided, however, that if on March 15, 1995, Rochester
reasonably believes that the Closing will not occur before March
31, 1995, then the Audit shall be conducted as of March 31, 1995,
and completed on or before May 15, 1995 (the date as of which the <PAGE>
<PAGE> 31
Audit is conducted being known as the "Audit Date"). In
accordance with this Section 6.3(a), WCT shall provide, at WCT's
expense upon Rochester's request, suitable office space in WCT's
offices and administrative support for no more than four
employees or agents of Rochester to observe the operation and
management of WCT and its subsidiaries.
(b) Each of Rochester and Sub will hold and will cause its
officers, employees, auditors and other agents to hold in
confidence, unless compelled to disclose by judicial or
administrative process or by other requirements of law, all
documents and information concerning WCT and its subsidiaries
furnished to Rochester or Sub in connection with the transactions
contemplated in this Agreement (except to the extent that such
information can be shown to have been (i) previously known by
Rochester or Sub from sources other than WCT, or its directors,
officers, auditors or other agents, (ii) in the public domain
through no fault of Rochester or Sub or (iii) later lawfully
acquired by Rochester or Sub on a non-confidential basis from
other sources who are not known by Rochester or Sub to be bound
by a confidentiality agreement (after inquiry of such sources) or
otherwise prohibited from transmitting the information to
Rochester or Sub by a contractual, legal or fiduciary obligation)
and will not release or disclose such information to any other
person, except its auditors and other advisors in connection with
this Agreement who need to know such information. If the
transactions contemplated by this Agreement are not consummated,
such confidence shall be maintained for a period of three years
from the date hereof and, if requested by or on behalf of WCT,
Rochester and Sub will, and will use all reasonable efforts to
cause their auditors and other agents to, return to WCT or
destroy all copies of written information furnished by WCT to
Rochester and Sub or their agents, representatives or advisors.
It is understood that Rochester and Sub shall be deemed to have
satisfied their obligation to hold such information confidential
if they exercise the same care as they take to preserve
confidentiality for their own similar information.
(c) No investigation pursuant to this Section 6.3 shall
affect any representations or warranties of the parties herein or
the conditions to the obligations of the parties hereto.
<PAGE>
<PAGE> 32
SECTION 6.4 No Solicitation of Transactions. WCT, its
affiliates and their respective officers, directors, employees,
representatives and agents shall immediately cease any existing
discussions or negotiations, if any, with any parties conducted
heretofore with respect to any acquisition or exchange of all or
any material portion of the assets of, or any equity interest in,
WCT or any of its subsidiaries or any business combination with
WCT or any of its subsidiaries. WCT may, directly or indirectly,
furnish information and access, in each case only in response to
a request for such information or access to any person made after
the date hereof which was not encouraged, solicited or initiated
by WCT or any of its affiliates or any of its or their respective
officers, directors, employees, representatives or agents after
the date hereof, pursuant to appropriate confidentiality
agreements, and may participate in discussions and negotiate with
such entity or group concerning any merger, sale of assets, sale
of shares of capital stock or similar transaction (including an
exchange of stock or assets) involving WCT or any subsidiary or
division of WCT, if such entity or group has submitted a written
proposal to the Board relating to any such transaction and
failing to take such action would constitute a breach of the
Board's fiduciary duty under applicable law. The Board shall
provide a copy of any such written proposal to Rochester
immediately after receipt thereof. WCT shall keep Rochester
promptly advised of all developments which could reasonably be
expected to culminate in the Board of Directors withdrawing,
modifying or amending its recommendation of the Merger and the
other transactions contemplated by this Agreement. Except as set
forth in this Section 6.4, neither WCT or any of its affiliates,
nor any of its or their respective officers, directors,
employees, representatives or agents, shall, directly or
indirectly, encourage, solicit, participate in or initiate
discussions or negotiations with, or provide any information to,
any corporation, partnership, person or other entity or group
(other than Rochester and Sub, any affiliate or associate of
Rochester and Sub or any designees of Rochester or Sub)
concerning any merger, sale of assets, sale of shares of capital
stock or similar transactions (including an exchange of stock or
assets) involving WCT or any subsidiary or division of WCT;
provided, however, that nothing in this Section 6.4 shall prevent <PAGE>
<PAGE> 33
the Board from taking, and disclosing to WCT's shareholders, a
position contemplated by Rules 14d-9 and 14e-2 promulgated under
the Exchange Act with regard to any tender offer; provided,
further, that the Board shall not recommend that the shareholders
of WCT tender their Shares in connection with any such tender
offer unless failing to take such action would constitute a
breach of the Board's fiduciary duty under applicable law. WCT
agrees not to release any third party from, or waive any
provisions of, any confidentiality or standstill agreement to
which WCT is a party, unless failing to release such third party
or waive such provisions would constitute a breach of the Board's
fiduciary duty under applicable law.
SECTION 6.5 Employee Matters. Rochester shall cause
WCT and the Surviving Corporation to promptly pay or provide when
due all compensation and benefits earned through or prior to the
Effective Time as provided pursuant to the terms of any
compensation arrangements, employment agreements and employee or
director benefit plans, programs and policies in existence as of
the date hereof for all employees (and former employees) and
directors (and former directors) of WCT. Rochester and WCT agree
that WCT and the Surviving Corporation shall pay promptly or
provide when due all compensation and benefits required to be
paid pursuant to the terms of any individual agreement with any
employee, former employee, director or former director in effect
and disclosed to Rochester as of the date hereof. Nothing in
this Agreement shall require the continued employment of any
person or prevent WCT and/or the Surviving Corporation from
taking any action or refraining from taking any action which WCT
could take or refrain from taking prior to the Effective Time.
SECTION 6.6 Further Action; Reasonable Best Efforts.
Upon the terms and subject to the conditions hereof, each of the
parties hereto shall use its reasonable best efforts: to take, or
cause to be taken, all appropriate action, and to do or cause to
be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective
the transactions contemplated by this Agreement, including but
not limited to (i) cooperation in the preparation and filing of
the Proxy Statement, any required filings under the HSR Act and <PAGE>
<PAGE> 34
other laws described in clause (i) of each of Sections 3.5(b) and
4.3(b) (including, without limitation, any required filings with
the California Public Utilities Commission and any other state
agencies regulating the operations of WCT and its subsidiaries)
and with the NYPSC as provided in clause (ii) of Section 4.3(b),
and any amendments to any thereof and (ii) using its reasonable
best efforts to make all required regulatory filings and
applications and to obtain all licenses, permits, consents,
approvals, authorizations, qualifications and orders of
governmental authorities and parties to contracts with WCT and
its subsidiaries as are necessary for the consummation of the
transactions contemplated by this Agreement and to fulfill the
conditions to the Merger. In case at any time after the
Effective Time any further action is necessary or desirable to
carry out the purposes of this Agreement, the proper officers and
directors of each party to this Agreement shall use their
reasonable best efforts to take all such necessary action.
SECTION 6.7 Public Announcements. Rochester and WCT
shall mutually agree on the form and content of any public
announcement which shall be made concerning this Agreement or the
transactions contemplated hereby and neither Rochester nor WCT
shall make any such public announcement without the consent of
the other, which consent shall not be unreasonably withheld or
delayed, provided that nothing herein shall prohibit Rochester or
WCT from making any public announcement or other disclosure
required by law or the policy of any exchange on which such
party's securities are listed, provided that such announcement or
disclosure shall be previously approved by the other party, which
approval shall not be unreasonably withheld or delayed, unless
any law, rule or regulation makes obtaining such prior approval
impracticable.
SECTION 6.8 Disposition of Litigation. WCT agrees that
it will not settle any litigation currently pending, or commenced
after the date hereof, against WCT or any of its directors by any
shareholder of WCT relating to this Agreement, without the prior
written consent of Rochester.
<PAGE>
<PAGE>35
SECTION 6.9 State Takeover Laws. WCT shall, at the
request of Rochester, take all necessary steps to assist in any
challenge by Rochester to the validity or applicability to the
transactions contemplated by this Agreement, including the Merger
and the Shareholder's Agreements or any other agreements entered
into contemporaneously with this Agreement or subsequent thereto
in connection with such transactions, of any state takeover law.
SECTION 6.10 Directors' and Officers' Indemnification and
Insurance.
(a) The By-Laws of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification than
are set forth in Article IX of the By-laws of WCT, which
provisions shall not be amended, repealed or otherwise modified
for a period of five years from the Effective Time in any manner
that would adversely affect the rights thereunder of individuals
who at the Effective Time were directors, officers, agents or
employees of WCT or otherwise entitled to indemnification
pursuant to Article IX of WCT's By-Laws.
(b) Rochester shall use its reasonable best efforts to
cause to be maintained in effect for three years from the
Effective Time the current policies of the directors' and
officers' liability insurance maintained by WCT (provided that
Rochester may substitute therefor policies of at least the same
coverage containing terms and conditions which are not materially
less advantageous) with respect to matters occurring prior to the
Effective Time to the extent available; provided, however, that
in no event shall Rochester or WCT be required to expend more
than an amount per year equal to 150% of current annual premiums
paid by WCT. Subject to the foregoing, from and after the
Closing, the Surviving Corporation will maintain all rights to
indemnification (including rights with respect to the advancement
of expenses incurred in defense of any action or suit) and
exculpation existing on the date of this Agreement in favor of
current or former directors, officers and employees of WCT (the
"Indemnified Parties") as provided in WCT's Articles of
Incorporation and Bylaws or in indemnification agreements in
existence as of the date of this Agreement. The Surviving
Corporation shall not take any action with a purpose to hinder,
delay or make more difficult the exercise of such rights of <PAGE>
<PAGE> 36
indemnification or exculpation or the ability of the Surviving
Corporation to provide such indemnification. This Section 6.10
is intended to be for the benefit of and to grant third party
rights to the Indemnified Parties whether or not they are parties
to this Agreement and each of the Indemnified Parties shall be
entitled to enforce the covenants contained in this Section 6.10.
SECTION 6.11 Applications to the FCC and Other Regulatory
Agencies. As soon as practicable after execution of this
Agreement, Rochester and WCT shall determine the extent of
traffic originated by West Coast and any of its affiliates in
each state in which they hold any certificates or authorizations
from the state telecommunications or utility regulatory authority
(a "PUC") and whether there exist legal and proper alternatives
to applying to the PUCs for their approval of the change of
control of WCT and its subsidiaries. Thereafter, Rochester, Sub,
WCT and its subsidiaries shall join in applications to those PUCs
for whose approval of the change of control of WCT and its
subsidiaries no legal and proper alternatives exist and the
Federal Communications Commission (the "FCC") (the FCC and the
PUCs being, together, the "Regulators"), requesting their
approval and authorization of the transactions contemplated by
this Agreement. Thereafter Rochester, Sub and WCT shall
cooperate with each other and shall take such actions as are
reasonable, necessary and proper to obtain expeditious, favorable
action by the Regulators.
SECTION 6.12 HSR Act. Promptly upon execution of this
Agreement, Rochester, Sub and WCT shall cause to be filed with
the Federal Trade Commission and the United States Department of
Justice, Antitrust Division, such applications, forms and
supporting documents as are required pursuant to the HSR Act.
The parties shall thereafter cooperate with each other and take
such actions as are reasonable, necessary and proper to respond
to any requests for additional information in connection
herewith.
ARTICLE VII - CONDITIONS PRECEDENT
SECTION 7.1 Conditions to Each Party's Obligation to <PAGE>
<PAGE> 37
Effect the Merger. The respective obligations of each party to
effect the Merger shall be subject to the waiver or satisfaction
prior to the Closing Date of the following conditions:
7.1.1 The Regulators having jurisdiction over the
change of control of WCT and its subsidiaries
contemplated by this Agreement shall have
approved the transactions contemplated hereby
and all such approvals shall be in full force
and effect; provided, that Rochester and Sub
shall not be obligated to effect the Merger,
if, in the good faith judgment of either of
the Boards of Directors of Rochester or Sub,
there is contained in an authorization of any
such Regulator any term, condition or
provision which shall have a Material Adverse
Effect on the operations of WCT, or on any of
the Significant Subsidiaries, or on Rochester
or on any one or more of Rochester's
subsidiaries then subject to the jurisdiction
of such Regulator.
7.1.2 The applicable waiting period under the HSR
Act shall have expired or been terminated.
7.1.3 This Agreement shall have been approved by
the affirmative vote of the holders of two-
thirds of the outstanding Shares entitled to
vote thereon.
7.1.4 No statute, rule, regulation, executive
order, decree, ruling, injunction or other
order (whether temporary, preliminary or
permanent) shall have been enacted, entered,
promulgated or enforced by any United States
or state court or governmental authority
which prohibits, restrains, enjoins or
restricts the consummation of the Merger.
SECTION 7.2 Conditions to the Obligations of Rochester
and Sub. The obligations of Rochester and Sub to effect the
Merger shall be subject to the waiver or satisfaction prior to
the Closing Date of the following conditions:
<PAGE>
<PAGE> 38
7.2.1 The representations and warranties of WCT set
forth in this Agreement (and in any exhibit
or schedule attached hereto or in any
certificate delivered pursuant hereto) that
are qualified as to materiality shall be true
and correct and all such representations and
warranties that are not so qualified shall be
true and correct in all material respects, in
each case as of the date when made and
(except to the extent such representations
speak as of an earlier date) as of the
Closing Date as though made on and as of the
Closing Date, and Rochester shall have
received a certificate signed on behalf of
WCT by an executive officer of WCT to that
effect.
7.2.2 WCT, Frockt and Edgecomb shall have performed
in all material respects all obligations
required to be performed by it or him, as
applicable, under this Agreement and the
Shareholder's Agreements, and each of the
Shareholder's Agreements and the Non-Compete
Agreements shall be in full force and effect,
and Rochester shall have received
certificates to such effect (i) with respect
to WCT regarding this Agreement, signed on
behalf of WCT by an executive officer of WCT,
(ii) with respect to Frockt regarding the
Shareholder's Agreement and the Non-Compete
Agreement to which Frockt is a party, signed
by Frockt, and (iii) with respect to Edgecomb
regarding the Shareholder's Agreement and the
Non-Compete Agreement to which Edgecomb is a
party, signed by Edgecomb.
7.2.3 There shall not have been instituted any
action or proceeding by any governmental
authority before any federal or state court,
and no order or preliminary or permanent
injunction shall have been entered in any
action or proceeding before any federal or
<PAGE>
<PAGE> 39
state court or governmental, administrative
or regulatory authority or agency, located or
having jurisdiction within the United States
or any country or economic region in which
either WCT or Rochester, directly or
indirectly, has material assets or
operations, and no other action shall have
been taken, proposed or threatened, and no
statute, rule, regulation, legislation,
interpretation, judgment or order shall have
been proposed, sought, enacted, entered,
enforced, promulgated, amended, issued or
deemed applicable to Sub, WCT or any
subsidiary or affiliate of Sub or WCT or the
Merger, by any legislative body, court,
government or governmental, administrative or
regulatory authority or agency located or
having jurisdiction within the United States
or any country or economic region in which
either WCT or Rochester, directly or
indirectly, has material assets or
operations, which could reasonably be
expected to have the effect of: (i) making
illegal, or otherwise directly or indirectly
restraining or prohibiting or making
materially more costly, the consummation of
any of the transactions contemplated by this
Agreement or materially delaying the Merger;
(ii) prohibiting or materially limiting the
ownership or operation by WCT or any of its
subsidiaries, or by Rochester, Sub or any of
Rochester's subsidiaries of all or any
material portion of the business or assets of
WCT or any of its material subsidiaries or
Rochester or any of its subsidiaries, or
compelling Sub, Rochester or any of
Rochester's subsidiaries to dispose of or
hold separate all or any material portion of
the business or assets of WCT or any of its
material subsidiaries or Rochester or any of
<PAGE>
<PAGE> 40
its subsidiaries, as a result of the
transactions contemplated by this Agreement;
(iii) requiring divestiture by Rochester or
any of its subsidiaries, directly or
indirectly, of the Surviving Corporation; or
(iv) which would reasonably be expected to
materially adversely affect the business,
financial condition or results of operations
of WCT and its subsidiaries taken as a whole
or the value of WCT to Sub or Rochester.
7.2.4 There shall not have occurred (i) any general
suspension of trading in, or limitation on
prices for, securities on any national
securities exchange or in the over-the-
counter market in the United States, or (ii)
a commencement of a war or armed hostilities
or other national or international calamity
directly or indirectly involving the United
States which would reasonably be expected to
have a Material Adverse Effect or materially
adversely affect (or materially delay) the
consummation of the Merger.
7.2.5 Sub shall have purchased Frockt's Shares in
accordance with the terms and conditions of
the Shareholder's Agreement signed by him.
7.2.6 WCT shall have filed with the SEC its Annual
Report on Form 10-K for the fiscal year ended
June 30, 1994 (the "1994 10-K"), no later
than November 15, 1994, and the 1994 10-K
shall be substantially the same as the draft
thereof provided to Rochester on or about
November 4, 1994.
7.2.7 PaineWebber Incorporated (the "Financial
Adviser") shall have delivered to the Board
of Directors of WCT its written opinion (or
oral opinion confirmed in writing) that the
Merger Consideration is fair to the holders
of Shares from a financial point of view by
no later than 5:00 p.m., New York City time
on November 8, 1994. WCT shall have been
<PAGE>
<PAGE>41
authorized by the Financial Adviser to
permit, subject to prior review and consent
by such Financial Adviser (such consent not
to be unreasonably withheld), the inclusion
of such fairness opinion (or a reference
thereto) in the Proxy Statement referred to
in Section 3.14.
7.2.8 As of the Audit Date, the current liabilities
of WCT and its subsidiaries, taken as a
whole, shall not exceed the current assets of
WCT and its subsidiaries, taken as a whole,
by more than $13,500,000 ("current assets"
and "current liabilities" as defined in
accordance with generally accepted accounting
principles). As of the Audit Date, the
monthly average of the net revenues (net of
credit adjustments) of WCT and its
subsidiaries, taken as a whole, for the four
months ending on the Audit Date shall be not
less than $12,000,000. As of the Audit Date,
the monthly average of the gross margins of
WCT and its subsidiaries, taken as a whole,
for the three months ending on the Audit Date
shall be not less than 28%. Rochester shall
have received certificates signed on behalf
of WCT by the Chairman and Chief Executive
Officer and the Chief Financial Officer of
WCT to the effect that, as of the Closing,
such officers have no knowledge of any
circumstance that might cause the conditions
contained in this Section 7.2.8 to be untrue.
7.2.9 The Audit shall have been completed.
7.2.10 WCT shall have timely filed all SEC Reports
required to be filed after the date of this
Agreement.
SECTION 7.3 Conditions to the Obligations of WCT. The
obligations of WCT to effect the Merger shall be subject to the
waiver or satisfaction prior to the Closing Date of the following
conditions:
7.3.1 The representations and warranties of
Rochester and Sub set forth in this Agreement
<PAGE>
<PAGE> 42
(and in any exhibit or schedule attached
hereto or in any certificate delivered
pursuant hereto) that are qualified as to
materiality shall be true and correct and all
such representations and warranties that are
not so qualified shall be true and correct in
all material respects, in each case as of the
date when made and (except to the extent such
representations speak as of an earlier date)
as of the Closing Date as though made on and
as of the Closing Date, and WCT shall have
received certificates to such effect (i) with
respect to Rochester, signed on behalf of
Rochester by an executive officer of
Rochester and (ii) with respect to Sub,
signed on behalf of an executive officer of
Sub.
7.3.2 Rochester and Sub shall have performed in all
material respects all obligations required
to be performed by them under this Agreement,
and WCT shall have received certificates to
such effect (i) with respect to Rochester,
signed on behalf of Rochester by an executive
officer of Rochester and (ii) with respect to
Sub, signed on behalf of an executive officer
of Sub.
ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination. This Agreement may be
terminated at any time prior to the Effective Time, whether
before or after approval of the matters presented to the
shareholders of WCT in connection with the Merger:
(a) By mutual written consent of Rochester, Sub and WCT; or
(b) By Rochester or WCT if any court of competent
jurisdiction or other governmental body located or having
jurisdiction within the United States or any country in which
either WCT or Rochester, directly or indirectly, has material
assets or operations, shall have issued an order, decree or
ruling or taken any other action restraining, enjoining or <PAGE>
<PAGE> 43
otherwise prohibiting the Merger and such order, decree, ruling
or other action is or shall have become final and nonappealable;
(c) By Rochester, upon a breach of any representation,
warranty, covenant or agreement on the part of WCT set forth in
this Agreement (or in any exhibit or schedule attached hereto or
in any certificate delivered pursuant hereto), or if such
representation or warranty of WCT shall have become untrue,
unless, in either case, a cure is capable of being made and is
effected prior to the earlier of (i) ten days following notice of
such breach and (ii) March 31, 1995.
(d) By either Rochester or WCT, if the Merger shall not
have been consummated before March 31, 1995, provided, that the
terminating party may terminate this Agreement pursuant to this
Section 8.1(d) only if there shall not have been a material
breach of any representation, warranty, covenant or agreement
contained in this Agreement on the part of the terminating party
set forth in this Agreement (or in any certificate, schedule or
other document delivered pursuant hereto or in connection with
the transactions contemplated hereby), unless, in either case, a
cure is capable of being made and is effected prior to the
earlier of (i) ten days following notice of such breach and (ii)
March 31, 1995.
(e) By either Rochester or WCT, if this Agreement shall
fail to receive the requisite vote for approval and adoption by
the shareholders of WCT as provided in Section 7.1.3 of this
Agreement.
(f) By Rochester, if (i) the Board of Directors of WCT or
any committee thereof shall have withdrawn, modified or changed
its approval or recommendation of the Merger or this Agreement in
any manner adverse to Rochester or Sub, or shall have approved or
recommended any takeover proposal, business combination or other
acquisition of WCT (other than the Merger) or shall have directed
its officers to effect any of the foregoing, (ii) any corporation
(including WCT or any of its subsidiaries or affiliates),
partnership, person or other entity or group (as defined in
Section 13(d)(3) of the Exchange Act), other than Rochester or
any of its subsidiaries or affiliates, shall have acquired
beneficial ownership (determined for the purposes of this Section
8.1(f) as set forth in Rule 13d-3 promulgated under the Exchange
Act) of 20% or more of the outstanding Shares, (iii) any such <PAGE>
<PAGE> 44
corporation, partnership, person, entity or group shall have
entered into a definitive agreement or an agreement in principle
with WCT with respect to a tender offer or exchange offer for any
Shares or a merger, consolidation or other business combination
with or involving WCT or any of its subsidiaries, or (iv) the
Board of Directors of WCT shall have directed its officers to
enter into a definitive agreement or an agreement in principle
with any person or group (other than Rochester or Sub) with
respect to a tender offer or exchange offer for any Shares or a
merger, consolidation or other business combination with or
involving WCT or any of its subsidiaries.
(g) By WCT, if prior to the Closing Date, any person shall
have made a bona fide offer to acquire WCT (i) that the Board of
Directors of WCT has determined in its good faith judgment is
more favorable to WCT's shareholders than the Merger and (ii) as
a result of which, after consultation with independent counsel,
such Board is obligated by its fiduciary duty under applicable
law to terminate this Agreement.
The right of any party hereto to terminate this Agreement
pursuant to this Section 8.1 shall remain operative and in full
force and effect regardless of any investigation made by or on
behalf of any party hereto, any person controlling any such party
or any of their respective officers or directors, whether prior
to or after execution of this Agreement.
SECTION 8.2 Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 8.1, this
Agreement shall forthwith become void and there shall be no
liability on the part of any party hereto except as set forth in
Section 8.3 and Section 9.1; provided, however, that nothing
herein shall relieve any party from liability for any breach
hereof.
SECTION 8.3 Fees and Expenses. (a) WCT agrees
that if this Agreement shall be terminated pursuant to either:
(i) Section 8.1(c) (other than as a result of a breach by WCT of
its representations and warranties contained in Section 3.16 of
this Agreement or as a result of the failure of the conditions
contained in Section 7.2.8 of this Agreement) by Rochester, (ii)
Section 8.1(e) by Rochester only under the following circumstance
- - the Proxy Statement soliciting approval by the WCT shareholders <PAGE>
<PAGE> 45
of the Merger is one also soliciting approval of a Third Party
Acquisition proposal (a "Competing Proposal") and the WCT
shareholders do not approve the Merger and rather approve the
Competing Proposal, (iii) Section 8.1(f)(i), (iii) or (iv) by
Rochester or (iv) Section 8.1(g) by WCT; then in any of cases
(i), (ii), (iii) or (iv) above and at any time prior to or within
nine months after the termination of this Agreement a Third Party
Acquisition is effected with any person or WCT enters into
definitive agreements with respect to a Third Party Acquisition
with any person, WCT shall pay to Rochester, within ten business
days following the execution and delivery of such agreement or
such termination, as the case may be, a fee, in cash, of
$3,700,000, provided, however, that WCT in no event shall be
obligated to pay more than one such $3,700,000 fee with respect
to all such agreements and occurrences and such termination which
shall occur in accordance with this Section 8.3(a).
(b) WCT agrees that if this Agreement shall be terminated
pursuant to Section 8.1(c) as a result of a breach by WCT of its
representations and warranties contained in Section 3.16 of this
Agreement or as a result of the failure of the conditions
contained in Section 7.2.8 of this Agreement, and at any time
prior to or within nine months after the termination of this
Agreement a Third Party Acquisition is effected with any person
or WCT enters into definitive agreements with respect to a Third
Party Acquisition with any person, then WCT shall pay to
Rochester, within ten business days following the execution and
delivery of such agreement or such termination, as the case may
be, a fee, in cash, of $2,500,000, provided, however, that WCT in
no event shall be obligated to pay more than one such $2,500,000
fee with respect to all such agreements and occurrences and such
termination which shall occur in accordance with this Section
8.3(b).
(c) For purposes of this Section 8.3, the term "Third Party
Acquisition" shall mean the occurrence of any of the following
events: (i) the acquisition of WCT by merger, tender offer or
otherwise by any person other than Rochester, Sub or any
affiliate thereof (a "Third Party"); (ii) the acquisition by a
Third Party of all or substantially all of the total assets of
WCT or any one or both of its Significant Subsidiaries, in each
case taken as a whole; or (iii) the acquisition by a Third Party
of a majority of the outstanding Shares.
<PAGE>
<PAGE> 46
(d) Each party shall bear its own expenses in connection
with this Agreement and the transactions contemplated hereby.
SECTION 8.4 Amendment. Subject to Section 6.3, this
Agreement may be amended by the parties hereto by action taken by
or on behalf of their respective Boards of Directors at any time
prior to the Effective Time; provided, however, that, after
approval of the Merger by the shareholders of WCT, no amendment
may be made which would reduce the amount or change the type of
consideration into which each Share shall be converted upon
consummation of the Merger. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
SECTION 8.5 Waiver. Subject to Section 6.3, at any time
prior to the Effective Time, any party hereto may (a) extend the
time for the performance of any of the obligations or other acts
of the other parties hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any
document delivered pursuant hereto or (c) waive compliance with
any of the agreements or conditions contained herein to the
extent such conditions are for the benefit of the party so
waiving them. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties
to be bound thereby.
ARTICLE IX - GENERAL PROVISIONS
SECTION 9.1 Non-Survival of Representations, Warranties
and Agreements. The representations, warranties and
agreements in this Agreement shall terminate at the Effective
Time or upon the termination of this Agreement pursuant to
Section 8.1, as the case may be, except that the agreements set
forth in Article I, Section 6.7 and Article IX shall survive the
Effective Time indefinitely and those set forth in Section 6.4,
Section 8.3 and Article IX shall survive termination
indefinitely.
SECTION 9.2 Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing
and shall be given (and shall be deemed to have been duly given <PAGE>
<PAGE> 47
upon receipt) by delivery in person, by cable, telecopy, telegram
or telex or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as
shall be specified by like notice):
if to Rochester or Sub:
Rochester Telephone Corporation
180 South Clinton Avenue
Rochester, New York 14646
Attention: John K. Purcell
Telecopier: (716) 325-6113
with a copy to:
Helen A. Zamboni, Esq.
Rochester Telephone Corporation
180 South Clinton Avenue
Rochester, New York 14646
Telecopier: (716) 546-7823
if to WCT:
WCT Communications, Inc.
135 East Ortega Street
Santa Barbara, California 93101
Attention: Richard Frockt
Telecopier: (213) 689-2337
with copies to:
Thomas J. Poletti, Esq.
Freshman, Marantz, Orlanski, Cooper & Klein
9100 Wilshire Boulevard
8th Floor East
Beverly Hills, California 90212-3480
Telecopier: (310) 274-8293
<PAGE>
<PAGE> 48
and to:
Joseph D. Abkin, Esq.
Fell, Marking, Abkin & Montgomery
222 East Carillo Street
Suite 400
Santa Barbara, California 93101-2142
Telecopier: (805) 965-7237
SECTION 9.3 Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" of a person means a person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the first
mentioned person;
(b) "beneficial owner" with respect to any Shares means a
person who shall be deemed to be the beneficial owner of such
Shares (i) which such person or any of its affiliates or
associates beneficially owns, directly or indirectly, (ii) which
such person or any of its affiliates or associates (as such term
is defined in Rule 12b-2 of the Exchange Act) has, directly or
indirectly, (A) the right to acquire (whether such right is
exercisable immediately or subject only to the passage of time),
pursuant to any agreement, arrangement or understanding or upon
the exercise of consideration rights, exchange rights, warrants
or options, or otherwise, or (B) the right to vote pursuant to
any agreement, arrangement or understanding or (iii) which are
beneficially owned, directly or indirectly, by any other persons
with whom such person or any of its affiliates or person with
whom such person or any of its affiliates or associates has any
agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any shares;
(c) "control" (including the terms "controlled by" and
"under common control with") means the possession, directly or
indirectly or as trustee or executor, of the power to direct or
cause the direction of the management policies of a person,
whether through the ownership of stock, as trustee or executor,
by contract or credit arrangement or otherwise;
(d) "generally accepted accounting principles" shall mean
the generally accepted accounting principles set forth in the <PAGE>
<PAGE> 49
opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting
Standards Board or in such other statements by such other entity
as may be approved by a significant segment of the accounting
profession in the United States, in each case applied on a basis
consistent with the manner in which the audited financial
statements for the fiscal year of WCT ended June 30, 1994, were
prepared;
(e) "knowledge" means actual knowledge after reasonable
inquiry of the officers of WCT;
(f) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or
group (as defined in Section 13(d)(3) of the Exchange Act); and
(g) "subsidiary" or "subsidiaries" of WCT, the Surviving
Corporation, Rochester or any other person means any corporation,
partnership, joint venture or other legal entity of which WCT,
the Surviving Corporation, Rochester or such other person, as the
case may be (either alone or through or together with any other
subsidiary), owns, directly or indirectly, 50% or more of the
stock or other equity interests the holder of which is generally
entitled to vote for the election of the board of directors or
other governing body of such corporation or other legal entity.
SECTION 9.4 Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable of
being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected
in any manner adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable of
being enforced, the parties hereto shall negotiate in good faith
to modify this Agreement so as to effect the original intent of
the parties as closely as possible in an acceptable manner to the
end that the transactions contemplated hereby are fulfilled to
the fullest extent possible.
SECTION 9.5 Entire Agreement; Assignment. This
Agreement constitutes the entire agreement among the parties with <PAGE>
<PAGE> 50
respect to the subject matter hereof and supersedes all prior
agreements and undertakings, both written and oral, among the
parties, or any of them, with respect to the subject matter
hereof. This Agreement shall not be assigned by operation of law
or otherwise, except that Rochester and Sub may assign all or any
of their respective rights and obligations hereunder to any
direct or indirect wholly owned subsidiary or subsidiaries of
Rochester, provided that no such assignment shall relieve the
assigning party of its obligations hereunder if such assignee
does not perform such obligations.
SECTION 9.6 Parties in Interest. This Agreement shall
be binding upon and inure solely to the benefit of each party
hereto, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by reason
of this Agreement.
SECTION 9.7 Governing Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the
State of New York, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws thereof,
except to the extent that the consummation of the Merger is
governed by Washington Law.
SECTION 9.8 Headings. The descriptive headings
contained in this Agreement are included for convenience of
reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.9 Counterparts. This Agreement may be executed
in one or more counterparts, and by the different parties hereto
in separate counterparts, each of which when executed shall be
deemed to be an original but all of which taken together shall
constitute one and the same agreement.
<PAGE>
<PAGE> 51
IN WITNESS WHEREOF, Rochester, Sub and WCT have caused this
Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
ROCHESTER TELEPHONE CORPORATION
/s/Louis L. Massaro
By: ---------------------------
Name: Louis L. Massaro
Title: Corporate Vice President
ROCHESTER SUBSIDIARY TWENTY-EIGHT, INC.
/s/Louis L. Massaro
By: ----------------------------
Name: Louis L. Massaro
Title: Vice President
WCT COMMUNICATIONS, INC.
/s/Richard Frockt
By: ----------------------------
Name: Richard Frockt
Title: Chairman and
Chief Executive Officer
<PAGE>
<PAGE> 1
SHAREHOLDER'S AGREEMENT
SHAREHOLDER'S AGREEMENT (this "Agreement"), dated as of
November 8, 1994, by and between ROCHESTER TELEPHONE CORPORATION,
a company organized under the laws of the State of New York
("Rochester"), and RICHARD FROCKT ("Seller").
RECITALS
Concurrently herewith, Rochester, Rochester Subsidiary
Twenty-Eight, Inc. ("Sub"), a Delaware corporation and a
subsidiary of Rochester, and WCT Communications, Inc. ("WCT"), a
Washington corporation, are entering into an Agreement and Plan
of Merger of even date herewith (the "Merger Agreement";
capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), which provides, upon
the terms and subject to the conditions thereof, for the merger
of Sub with and into WCT.
As of the date hereof, Seller owns (either beneficially or
of record) 3,522,259 shares of WCT Common Stock (such shares of
Common Stock and any shares of WCT Common Stock now owned or
acquired after the date hereof and prior to the termination
hereof, whether upon exercise of options, warrants or other
convertible securities or otherwise, collectively, referred to
herein as the "Shares").
As a condition to their willingness to enter into the Merger
Agreement, Rochester and Sub have required that Seller agree, and
Seller has agreed, to grant a proxy to vote all Shares owned by
Seller on the terms and conditions provided for herein and
thereafter to sell to Sub all the Shares as further provided
herein.
AGREEMENT
To implement the foregoing and in consideration of the
mutual agreements contained herein, the parties agree as follows:
<PAGE>
<PAGE> 2
1. Agreement to Vote; Proxy.
1.1 Voting. Seller, solely in his capacity as a
shareholder of WCT, hereby agrees that, during the time this
Agreement is in effect, at any meeting of the stockholders of
WCT, however called, Seller shall vote (or cause to be voted) the
Shares (a) in favor of the Merger; (b) against any action or
agreement that would result in a breach in any respect of any
covenant, representation or warranty or any other obligation or
agreement of WCT under the Merger Agreement; and (c) against any
action or agreement (other than the Merger Agreement or the
transactions contemplated thereby) that would impede, interfere
with, delay, postpone or attempt to discourage the Merger,
including, but not limited to: (i) any extraordinary corporate
transaction, such as a merger, consolidation or other business
combination involving WCT or of any of its subsidiaries; (ii) a
sale or transfer of a material amount of assets of WCT or of any
of its subsidiaries or a reorganization, recapitalization or
liquidation of WCT or of any of its subsidiaries; (iii) any
change in the management or board of directors of WCT, except as
otherwise agreed to in writing by Sub; (iv) any change in the
present capitalization or dividend policy of WCT; or (v) any
other change in WCT's corporate structure or business.
Notwithstanding the foregoing, this section shall not be deemed
to limit Seller's fiduciary obligations as a director of WCT.
1.2 Proxy. Seller hereby grants to Rochester a proxy
to vote the Shares as indicated in Section 1.1 above. Seller
intends this proxy to be irrevocable and coupled with an interest
and will take such further action or execute such other
instruments as may be necessary to effectuate the intent of this
proxy and hereby revokes any proxy previously granted by him with
respect to the Shares.
2. Sale of Shares.
2.1 Terms of Sale. Subject to the terms and
conditions provided in this Agreement, Seller agrees to sell to
Sub all of Seller's right, title and interest in and to the
Shares, free and clear of all claims, liens, including
inheritance or estate tax liens, pledges, options and other
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<PAGE> 3
encumbrances (except in favor of Rochester and any of its
affiliates) (collectively, the "Liens") in consideration of the
payment to Seller by Sub of the sum of $6.00 U.S. per Share in
cash for each Share so sold (the "Purchase Price"). Settlement
of such sale (the "Sale") shall be made at a closing (the
"Closing") to be held immediately prior to the consummation of
the Merger (the "Closing Date") at Rochester's offices or at such
other time and place as shall be mutually agreed upon by the
parties.
2.2 Conditions to Each Party's Obligations to
Consummate the Sale. The respective obligations of each party
to consummate the Sale shall be subject to the satisfaction or
waiver prior to the Closing Date of the following conditions:
(a) No Violation; Waiting Periods. The consummation
of the Sale shall not violate or result in the violation of
the provisions of any applicable law or regulations. The
applicable waiting period relating to the consummation of
the Sale pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, shall have expired or
been terminated.
(b) No Injunction. On the Closing Date, there shall
not be any injunction, restraining order or decree of any
nature of any court or governmental agency or body in effect
that restrains or prohibits the consummation of the Sale.
(c) Merger Agreement. All of the conditions
contained in Article VII (other than Section 7.2.5) of the
Merger Agreement shall have been waived or satisfied, and
the Merger Agreement shall not have been terminated in
accordance with its terms.
2.3 Conditions to Obligations of Rochester. The
obligations of Rochester and Sub to consummate the Sale shall be
subject to the satisfaction or waiver prior to the Closing Date
of the following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Seller contained in this
Agreement that are qualified as to materiality shall be true
and correct and all such representations and warranties that
are not so qualified shall be true and correct in all
material respects, in each case as of the date when made and
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<PAGE> 4
(except to the extent such representations speak as of an earlier
date) as of the Closing Date as though made on and as of the
Closing Date.
(b) Covenants. Seller shall have performed in all
material respects all obligations required to be performed
by him under this Agreement.
(c) Delivery of Certificates. Sub shall have
received certificates representing all of the Shares, free
and clear of any Liens, duly endorsed in blank with
guaranteed signatures and all required transfer stamps, if
any.
2.4 Conditions to Obligations of Seller. The
obligations of Seller to consummate the Sale shall be subject to
the satisfaction or waiver prior to the Closing Date of the
following conditions:
(a) Representations and Warranties. Each of the
representations and warranties of Rochester contained in
this Agreement that are qualified as to materiality shall be
true and correct and all such representations and warranties
that are not so qualified shall be true and correct in all
material respects, in each case as of the date when made and
(except to the extent such representations speak as of an
earlier date) as of the Closing Date as though made on and
as of the Closing Date.
(b) Covenants. Rochester shall have performed in all
material respects all obligations required to be performed
by it under this Agreement.
(c) Payment of Consideration. Seller shall have
received the Purchase Price by wire transfer to an account
specified by Seller.
3. Expiration. Except as provided in Section 5.4, this
Agreement shall terminate on the Expiration Date. As used
herein, the term "Expiration Date" means the first to occur of
(a) the Effective Time, (b) termination of the Merger Agreement
in accordance with its terms (a "Termination"), and (c) written
notice of termination of this Agreement by Rochester to Seller.
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<PAGE> 5
4. Representation and Warranties.
4.1 Representation and Warranties of Rochester and
Sub. Rochester and Sub hereby represent and warrant to Seller as
follows:
(a) Due Authorization. This Agreement and the
consummation of the transactions contemplated hereby shall
constitute a valid and binding agreement of each of
Rochester and Sub, enforceable against Rochester and Sub in
accordance with its terms, except that such enforceability
(i) may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting or relating to enforcement of
creditors' rights generally and (ii) is subject to general
principles of equity.
(b) No Conflicts. Except as provided in Sections 5.2
and 5.3 of the Merger Agreement, (A) no filing with, and no
permit, authorization, consent or approval of, any state,
federal or foreign public body or authority is necessary for
the execution of this Agreement by Rochester and Sub and the
consummation by Rochester and Sub of the transactions
contemplated hereby and (B) neither the execution and
delivery of this Agreement by Rochester and Sub nor the
consummation by Rochester and Sub of the transactions
contemplated hereby nor compliance by Rochester and Sub with
any of the provisions hereof shall (1) conflict with or
result in any breach of any provision of the certificate of
incorporation or by-laws (or similar documents) of Rochester
or Sub, (2) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both)
a default (or give rise to any third party right of
termination, cancellation, material modification or
acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to
which Rochester or Sub is a party or by which it or any of
its properties or assets may be bound or (3) violate any
order, writ, injunction, decree, statute, rule or regulation
applicable to Rochester or Sub or any of its properties or
assets, except in the case of (2) or (3) for violations,
breaches or defaults which would not in the aggregate
<PAGE>
<PAGE> 6
materially impair the ability of Rochester or Sub to
perform its obligations hereunder.
(c) Good Standing. Rochester and Sub are
corporations duly organized, validly existing and in good
standing under the laws of the State of New York and
Delaware, respectively, and have all requisite corporate
power to execute and deliver this Agreement.
4.2 Representations and Warranties of Seller. Seller
hereby represents and warrants to Rochester and Sub as follows:
(a) Ownership of Shares. On the date hereof, the
Shares constitute all of the shares of WCT Common Stock
owned of record or beneficially by Seller. Seller has sole
voting power and sole power of disposition with respect to
all of the Shares, with no restrictions, subject to
applicable federal securities laws and the terms of this
Agreement, on Seller's rights pertaining thereto. In
addition, on the date hereof, Seller owns (either
beneficially or of record) no options or warrants to
acquire Shares.
(b) Power; Binding Agreement. Seller has the legal
capacity, power and authority to enter into and perform all
of his obligations under this Agreement. The execution,
delivery and performance of this Agreement by Seller will
not violate any other agreement to which Seller is a party
including, without limitation, any voting agreement,
stockholders agreement or voting trust. This Agreement has
been duly and validly executed and delivered by Seller and
constitutes a valid and binding agreement of Seller,
enforceable against Seller in accordance with its terms,
except that such enforceability (i) may be limited by
bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights
generally and (ii) is subject to general principles of
equity.
(c) No Conflicts. To the best knowledge of Seller,
except as provided in Section 3.5 of the Merger Agreement,
(A) no filing with, and no permit, authorization, consent or
approval of, any state, federal or foreign public body or
authority is necessary for the execution of this Agreement
<PAGE>
<PAGE> 7
by Seller and the consummation by Seller of the transactions
contemplated hereby and (B) neither the execution and
delivery of this Agreement by Seller nor the consummation by
Seller of the transactions contemplated hereby nor
compliance by Seller with any of the provisions hereof shall
(y) result in a violation or breach of, or constitute (with
or without notice or lapse of time or both) a default (or
give rise to any third party right of termination,
cancellation, material modification or acceleration) under
any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, license, contract, agreement or
other instrument or obligation to which Seller is a party or
by which he or any of his properties or assets may be bound
or (z) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to Seller or any of his
properties or assets, except in the case of (y) or (z) for
violations, breaches or defaults which would not in the
aggregate materially impair the ability of Seller to perform
his obligations hereunder.
(d) Certain Understanding. Seller understands and
acknowledges that Rochester is entering into, and causing
Sub to enter into, the Merger Agreement in reliance upon
Seller's execution and delivery of this Agreement.
5. Certain Covenants of Seller. Except in accordance
with the terms of this Agreement, Seller hereby covenants and
agrees as follows:
5.1 No Solicitation. Seller, solely in his capacity
as a shareholder of WCT, shall not, directly or indirectly,
solicit (including by way of furnishing information) any
inquiries or the making of any proposal by any person or entity
(other than Rochester or any affiliate of Rochester) which
constitutes, or may reasonably be expected to lead to, any sale
of the Shares, provided that the foregoing shall not be deemed to
limit Seller's fiduciary obligations as a director of WCT. If
Seller receives an inquiry or proposal with respect to the sale
of Shares, then Seller shall promptly inform Rochester of the
terms and conditions, if any, of such inquiry or proposal and the
identity of the person making it. Seller will immediately cease
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<PAGE> 8
and cause to be terminated any existing activities, discussions
or negotiations with any parties conducted heretofore with
respect to any of the foregoing; provided, however, that this
paragraph shall not be construed to require Seller to notify any
such parties of this Agreement or the Merger Agreement.
5.2 Restriction on Transfer, Proxies and Non-
Interference. Other than in favor of Rochester or any of its
affiliates, Seller hereby agrees, while this Agreement is in
effect, and except as contemplated hereby, not to (i) sell,
transfer, pledge, encumber, assign or otherwise dispose of, or
enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of the
Shares or (ii) grant any proxies, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any
Shares or (iii) take any action that would make any
representation or warranty of Seller contained herein untrue or
incorrect or have the effect of preventing or disabling Seller
from performing his obligations under this Agreement.
5.3 Additional Shares. Seller hereby agrees, while
this Agreement is in effect, to promptly notify Rochester of the
number of any Shares acquired, or options to acquire Shares, by
Seller, if any, after the date hereof.
5.4 Further Agreements.
(a) Fee. Notwithstanding Seller's compliance with
the terms of the Agreement, if, at any time after the date hereof
and prior to or within nine months after a Termination, (i) any
Shares are sold, exchanged or converted in connection with a
Third Party Acquisition (as defined in the Merger Agreement) or
(ii) WCT enters into definitive agreements with respect to a
Third Party Acquisition with any person which contemplates the
sale, exchange or conversion of Shares, then Seller shall pay to
Rochester, within five days following the consummation of any
such sale, exchange or conversion, an amount, in cash, with
respect to any such Share equal to the quotient of (x) (A) the
value of the consideration received by Seller for such Share in
connection with such Third Party Acquisition less (B)
$6.50,divided by (y) two, to the extent such quotient exceeds $0.
If any portion of such consideration shall consist of other than
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<PAGE> 9
cash, such consideration shall be valued based on its fair market
value. For purposes hereof, the fair market value of a publicly
traded security shall be deemed to be the average of the closing
prices of such security on the principal exchange or market on
which such security is traded during the five trading days
immediately preceding the date of valuation or, if any security
to be issued in respect of the Shares is not then a publicly
traded security, the fair market value shall be deemed to be the
fair market value, determined as set forth above, of the Shares
during such trading period. In the event the parties are unable
to agree on a valuation, the parties shall jointly select a
nationally recognized investment banking firm to value such
consideration, and the decision of such firm shall be binding
upon the parties. The parties agree to share equally the
expenses of such firm.
(b) Proxy Extension. Notwithstanding Seller's
compliance with the terms of this Agreement, in the event of a
Termination, then in such event, the grant to Rochester of
Seller's proxy to vote the Shares as provided in Section 1 of
this Agreement shall be extended as to 1,820,285 of the Shares
(the "Proxy Shares") for a period commencing on the date of the
Termination and ending six months after the date of the
Termination. The Proxy Shares may be voted in Rochester's sole
discretion and shall not be subject to the limitations contained
in Section 1 hereof.
6. Further Assurances. From time to time, at the other
party's request and without further consideration, each party
hereto shall execute and deliver such additional documents and
take all such further action as may be necessary or desirable to
consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
7. Stop Transfer Order. In furtherance of this
Agreement, concurrently herewith, Seller shall and hereby does
authorize WCT's counsel to notify WCT's transfer agent that there
is a stop transfer order with respect to all of the Shares (and
that this Agreement places limits on the voting and transfer of
such shares).
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<PAGE> 10
8. Miscellaneous.
8.1 Entire Agreement; Assignment. This Agreement (i)
constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof and (ii) shall
not be assigned by operation of law or otherwise, provided that
Rochester may assign its rights and obligations hereunder to any
direct or indirect wholly owned subsidiary of Rochester, but no
such assignment shall relieve Rochester of its obligations
hereunder if such assignee does not perform such obligations.
8.2 Amendments. This Agreement may not be modified,
amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto.
8.3 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall
be given (and shall be deemed to have been duly received if so
given) by hand delivery, telegram, telex or telecopy, or by mail
(registered or certified mail, postage prepaid, return receipt
requested) or by any courier service, such as Federal Express,
providing proof of delivery. All communications hereunder shall
be delivered to the respective parties at the following
addresses:
If to Seller:
Richard Frockt
c/o WCT Communications, Inc.
135 East Ortega Street
Santa Barbara, California 93101
with a copy to:
Thomas J. Poletti, Esq.
Freshman, Marantz, Orlanski, Cooper & Klein
9100 Wilshire Boulevard, 8th Floor East
Beverly Hills, California 90212-3480
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<PAGE> 11
and
Joseph D. Abkin, Esq.
Fell, Marking, Abkin & Montgomery
222 East Carillo Street
Suite 400
Santa Barbara, California 93101-2142
If to Rochester:
John K. Purcell
Rochester Telephone Corporation
180 South Clinton Avenue
Rochester, New York 14646
with a copy to:
Helen A. Zamboni, Esq.
Rochester Telephone Corporation
180 South Clinton Avenue
Rochester, New York 14646
or to such other address as the person to whom notice is given
may have previously furnished to the others in writing in the
manner set forth above.
8.4 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Washington, regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws thereof. The
parties have selected Washington law to govern this Agreement
because this Agreement involves, among other things, the voting
of shares of a Washington corporation.
8.5 Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants
or agreements contained in this Agreement will cause the other
party to sustain damages for which it would not have an adequate
remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the
aggrieved party shall be entitled to the remedy of specific
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<PAGE> 12
performance of such covenants and agreements and injunctive and
other equitable relief in addition to any other remedy to which
it may be entitled, at law or in equity.
8.6 Counterparts. This Agreement may be executed in
two counterparts, each of which shall be deemed to be an
original, but both of which shall constitute one and the same
Agreement.
8.7 Descriptive Headings. The descriptive headings
used herein are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
8.8 Severability. Whenever possible, each provision
or portion of any provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law
but if any provision or portion of any provision of this
Agreement is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such
jurisdiction, and this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never
been contained herein.
IN WITNESS WHEREOF, Rochester and Seller have caused this
Agreement to be duly executed as of the day and year first above
written.
ROCHESTER TELEPHONE CORPORATION
/s/ Louis L. Massaro
By: --------------------------
Name: Louis L. Massaro
Title: Corporate Vice President
RICHARD FROCKT
/s/ Richard Frockt
------------------------------
<PAGE>
<PAGE>1
SHAREHOLDER'S AGREEMENT
SHAREHOLDER'S AGREEMENT (this "Agreement"), dated as of
November 8, 1994, by and between ROCHESTER TELEPHONE CORPORATION,
a company organized under the laws of the State of New York
("Rochester"), and CHRISTOPHER E. EDGECOMB ("Seller").
RECITALS
Concurrently herewith, Rochester, Rochester Subsidiary
Twenty-Eight, Inc. ("Sub"), a Delaware corporation and a
subsidiary of Rochester, and WCT Communications, Inc. ("WCT"), a
Washington corporation, are entering into an Agreement and Plan
of Merger of even date herewith (the "Merger Agreement";
capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), which provides, upon
the terms and subject to the conditions thereof, for the merger
of Sub with and into WCT.
As of the date hereof, Seller owns (either beneficially or
of record) 902,655 shares of WCT Common Stock (such shares of
Common Stock and any shares of WCT Common Stock now owned or
acquired after the date hereof and prior to the termination
hereof, whether upon exercise of options, warrants or other
convertible securities or otherwise, collectively, referred to
herein as the "Shares").
As a condition to their willingness to enter into the Merger
Agreement, Rochester and Sub have required that Seller agree, and
Seller has agreed, to grant a proxy to vote all Shares owned by
Seller on the terms and conditions provided for herein.
AGREEMENT
To implement the foregoing and in consideration of the
mutual agreements contained herein, the parties agree as follows:
1. Agreement to Vote; Proxy.
1.1 Voting. Seller, solely in his capacity as a
shareholder of WCT, hereby agrees that, during the time this
Agreement is in effect, at any meeting of the stockholders of
WCT, however called, Seller shall vote (or cause to be voted) the
Shares (a) in favor of the Merger; (b) against any action or
<PAGE>
<PAGE>2
agreement that would result in a breach in any respect of any
covenant, representation or warranty or any other obligation or
agreement of WCT under the Merger Agreement; and (c) against any
action or agreement (other than the Merger Agreement or the
transactions contemplated thereby) that would impede, interfere
with, delay, postpone or attempt to discourage the Merger,
including, but not limited to: (i) any extraordinary corporate
transaction, such as a merger, consolidation or other business
combination involving WCT or of any of its subsidiaries; (ii) a
sale or transfer of a material amount of assets of WCT or of any
of its subsidiaries or a reorganization, recapitalization or
liquidation of WCT or of any of its subsidiaries; (iii) any
change in the management or board of directors of WCT, except as
otherwise agreed to in writing by Sub; (iv) any change in the
present capitalization or dividend policy of WCT; or (v) any
other change in WCT's corporate structure or business.
Notwithstanding the foregoing, this section shall not be deemed
to limit Seller's fiduciary obligations as a director of WCT.
1.2 Proxy. Seller hereby grants to Rochester a proxy
to vote the Shares as indicated in Section 1.1 above. Seller
intends this proxy to be irrevocable and coupled with an interest
and will take such further action or execute such other
instruments as may be necessary to effectuate the intent of this
proxy and hereby revokes any proxy previously granted by him with
respect to the Shares.
2. Expiration. This Agreement, Rochester's right to vote
the Shares and Seller's obligations pursuant hereto shall
terminate on the Expiration Date. As used herein, the term
"Expiration Date" means the first to occur of (a) the Effective
Time, (b) termination of the Merger Agreement in accordance with
its terms, and (c) written notice of termination of this
Agreement by Rochester to Seller.
3. Representation and Warranties.
3.1 Representation and Warranties of Rochester and
Sub. Rochester and Sub hereby represent and warrant to Seller as
follows:
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<PAGE>3
(a) Due Authorization. This Agreement and the
consummation of the transactions contemplated hereby shall
constitute a valid and binding agreement of each of
Rochester and Sub, enforceable against Rochester and Sub in
accordance with its terms, except that such enforceability
(i) may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting or relating to enforcement of
creditors' rights generally and (ii) is subject to general
principles of equity.
(b) No Conflicts. Except as provided in Sections 4.2
and 4.3 of the Merger Agreement, (A) no filing with, and no
permit, authorization, consent or approval of, any state,
federal or foreign public body or authority is necessary for
the execution of this Agreement by Rochester and Sub and the
consummation by Rochester and Sub of the transactions
contemplated hereby and (B) neither the execution and
delivery of this Agreement by Rochester and Sub nor the
consummation by Rochester and Sub of the transactions
contemplated hereby nor compliance by Rochester and Sub with
any of the provisions hereof shall (1) conflict with or
result in any breach of any provision of the certificate of
incorporation or by-laws (or similar documents) of Rochester
or Sub, (2) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both)
a default (or give rise to any third party right of
termination, cancellation, material modification or
acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to
which Rochester or Sub is a party or by which it or any of
its properties or assets may be bound or (3) violate any
order, writ, injunction, decree, statute, rule or regulation
applicable to Rochester or Sub or any of its properties or
assets, except in the case of (2) or (3) for violations,
breaches or defaults which would not in the aggregate
materially impair the ability of Rochester or Sub to perform
its obligations hereunder.
(c) Good Standing. Rochester and Sub are
corporations duly organized, validly existing and in good
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<PAGE>4
standing under the laws of the State of New York and Delaware,
respectively, and have all requisite corporate power to execute
and deliver this Agreement.
3.2 Representations and Warranties of Seller. Seller
hereby represents and warrants to Rochester and Sub as follows:
(a) Ownership of Shares. On the date hereof, the
Shares constitute all of the shares of WCT Common Stock
owned of record or beneficially by Seller. Except as
pursuant to the pledge by Seller of the Shares to Smith,
Barney in connection with an account maintained by Seller
with Smith, Barney, Seller has sole voting power and sole
power of disposition with respect to all of the Shares, with
no restrictions, subject to applicable federal securities
laws and the terms of this Agreement, on Seller's rights
pertaining thereto. In addition, on the date hereof, Seller
owns (either beneficially or of record) no options or
warrants to acquire Shares.
(b) Power; Binding Agreement. Seller has the legal
capacity, power and authority to enter into and perform all
of his obligations under this Agreement. The execution,
delivery and performance of this Agreement by Seller will
not violate any other agreement to which Seller is a party
including, without limitation, any voting agreement,
stockholders agreement or voting trust. This Agreement has
been duly and validly executed and delivered by Seller and
constitutes a valid and binding agreement of Seller,
enforceable against Seller in accordance with its terms,
except that such enforceability (i) may be limited by
bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights
generally and (ii) is subject to general principles of
equity.
(c) No Conflicts. To the best knowledge of Seller,
except as provided in Section 3.5 of the Merger Agreement,
(A) no filing with, and no permit, authorization, consent or
approval of, any state, federal or foreign public body or
authority is necessary for the execution of this Agreement
by Seller and the consummation by Seller of the transactions
contemplated hereby and (B) neither the execution and
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<PAGE> 5
delivery of this Agreement by Seller nor the consummation by
Seller of the transactions contemplated hereby nor compliance by
Seller with any of the provisions hereof shall (y) result in a
violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party
right of termination, cancellation, material modification or
acceleration) under any of the terms, conditions or provisions of
any note, bond, mortgage, indenture, license, contract, agreement
or other instrument or obligation to which Seller is a party or
by which he or any of his properties or assets may be bound or
(z) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Seller or any of his properties or
assets, except in the case of (y) or (z) for violations, breaches
or defaults which would not in the aggregate materially impair
the ability of Seller to perform his obligations hereunder.
(d) Certain Understanding. Seller understands and
acknowledges that Rochester is entering into, and causing
Sub to enter into, the Merger Agreement in reliance upon
Seller's execution and delivery of this Agreement.
4. Certain Covenants of Seller. Except in accordance
with the terms of this Agreement, Seller hereby covenants and
agrees as follows:
4.1 No Solicitation. Seller, solely in his capacity
as a shareholder of WCT, shall not, directly or indirectly,
solicit (including by way of furnishing information) any
inquiries or the making of any proposal by any person or entity
(other than Rochester or any affiliate of Rochester) which
constitutes, or may reasonably be expected to lead to, any sale
of the Shares, provided that the foregoing shall not be deemed to
limit Seller's fiduciary obligations as a director of WCT. If
Seller receives an inquiry or proposal with respect to the sale
of Shares, then Seller shall promptly inform Rochester of the
terms and conditions, if any, of such inquiry or proposal and the
identity of the person making it. Seller will immediately cease
and cause to be terminated any existing activities, discussions
or negotiations with any parties conducted heretofore with
respect to any of the foregoing; provided, however, that this
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<PAGE> 6
paragraph shall not be construed to require Seller to notify any
such parties of this Agreement or the Merger Agreement.
4.2 Restriction on Transfer, Proxies and Non-
Interference. Other than in favor of Rochester or any of its
affiliates, Seller hereby agrees, while this Agreement is in
effect, and except as contemplated hereby, not to (i) sell,
transfer, pledge, encumber, assign or otherwise dispose of, or
enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge,
encumbrance, assignment or other disposition of, any of the
Shares or (ii) grant any proxies, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any
Shares or (iii) take any action that would make any
representation or warranty of Seller contained herein untrue or
incorrect or have the effect of preventing or disabling Seller
from performing his obligations under this Agreement.
4.3 Additional Shares. Seller hereby agrees, while
this Agreement is in effect, to promptly notify Rochester of the
number of any Shares acquired, or options to acquire Shares, by
Seller, if any, after the date hereof.
5. Further Assurances. From time to time, at the other
party's request and without further consideration, each party
hereto shall execute and deliver such additional documents and
take all such further action as may be necessary or desirable to
consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement.
6. Stop Transfer Order. In furtherance of this
Agreement, concurrently herewith, Seller shall and hereby does
authorize WCT's counsel to notify WCT's transfer agent that there
is a stop transfer order with respect to all of the Shares (and
that this Agreement places limits on the voting and transfer of
such shares).
7. Miscellaneous.
7.1 Entire Agreement; Assignment. This Agreement (i)
constitutes the entire agreement among the parties with respect
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to the subject matter hereof and supersedes all other prior
agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof and (ii) shall
not be assigned by operation of law or otherwise, provided that
Rochester may assign its rights and obligations hereunder to any
direct or indirect wholly owned subsidiary of Rochester, but no
such assignment shall relieve Rochester of its obligations
hereunder if such assignee does not perform such obligations.
7.2 Amendments. This Agreement may not be modified,
amended, altered or supplemented, except upon the execution and
delivery of a written agreement executed by the parties hereto.
7.3 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall
be given (and shall be deemed to have been duly received if so
given) by hand delivery, telegram, telex or telecopy, or by mail
(registered or certified mail, postage prepaid, return receipt
requested) or by any courier service, such as Federal Express,
providing proof of delivery. All communications hereunder shall
be delivered to the respective parties at the following
addresses:
If to Seller:
Christopher E. Edgecomb
c/o WCT Communications, Inc.
135 East Ortega Street
Santa Barbara, California 93101
with a copy to:
Thomas J. Poletti, Esq.
Freshman, Marantz, Orlanski, Cooper & Klein
9100 Wilshire Boulevard, 8th Floor East
Beverly Hills, California 90212-3480
and
Joseph L. Cole, Esq.
Seed, Mackall & Cole
1332 Anacapa Street
Suite 200
Santa Barbara, California 93101
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If to Rochester:
John K. Purcell
Rochester Telephone Corporation
180 South Clinton Avenue
Rochester, New York 14646
with a copy to:
Helen A. Zamboni, Esq.
Rochester Telephone Corporation
180 South Clinton Avenue
Rochester, New York 14646
or to such other address as the person to whom notice is given
may have previously furnished to the others in writing in the
manner set forth above.
7.4 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Washington, regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws thereof. The
parties have selected Washington law to govern this Agreement
because this Agreement involves, among other things, the voting
of shares of a Washington corporation.
7.5 Specific Performance. Each of the parties hereto
recognizes and acknowledges that a breach by it of any covenants
or agreements contained in this Agreement will cause the other
party to sustain damages for which it would not have an adequate
remedy at law for money damages, and therefore each of the
parties hereto agrees that in the event of any such breach the
aggrieved party shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and
other equitable relief in addition to any other remedy to which
it may be entitled, at law or in equity.
7.6 Counterparts. This Agreement may be executed in
two counterparts, each of which shall be deemed to be an
original, but both of which shall constitute one and the same
Agreement.
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<PAGE>9
7.7 Descriptive Headings. The descriptive headings
used herein are inserted for convenience of reference only and
are not intended to be part of or to affect the meaning or
interpretation of this Agreement.
7.8 Severability. Whenever possible, each provision
or portion of any provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law
but if any provision or portion of any provision of this
Agreement is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction,
such invalidity, illegality or unenforceability will not affect
any other provision or portion of any provision in such
jurisdiction, and this Agreement will be reformed, construed and
enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never
been contained herein.
IN WITNESS WHEREOF, Rochester and Seller have caused this
Agreement to be duly executed as of the day and year first above
written.
ROCHESTER TELEPHONE CORPORATION
/s/ Louis L. Massaro
By: -------------------------
Name: Louis L. Massaro
Title: Corporate Vice President
CHRISTOPHER E. EDGECOMB
/s/ Christopher E. Edgecomb
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