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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 17, 1995
FRONTIER CORPORATION
(Exact name of registrant as specified in its charter)
New York 1-4166 16-0613330
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
180 South Clinton Avenue, Rochester, New York 14646
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 777-7100
Item 2 Acquisition
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Frontier Corporation ("Frontier") has finalized the
acquisition of American Sharecom, Inc. ("ASI"), a long distance
company headquartered in Minneapolis, Minnesota. Frontier's
acquisition of all of the outstanding shares of ASI, held by its
two shareholders, Steven C. Simon and James J. Weinert, was
completed as of the close of business on Friday, March 17, 1995.
Financial Statements pursuant to Form 8-K Item 7 for Frontier and
ASI were filed with the Commission on Form 8-K on February 13,
1995.
As permitted by General Instruction F to Form 8-K, the
Registrant incorporates by reference the information contained in
the press release which is filed as an Exhibit to this Report on
Form 8-K.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf of the undersigned hereunto duly authorized.
Frontier Corporation
(Registrant)
Dated: March 22, 1995 By: /s/Josephine S. Trubek
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Josephine S. Trubek
Corporate Secretary
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EXHIBIT INDEX
Exhibit Number Description
- -------------- ---------------
2-1 Stock Acquisition Agreement Filed herewith
2-2 Registration Rights Agreement Filed herewith
99 Press Release dated Filed herewith
March 20, 1995
regarding finalization
of purchase of American
Sharecom, Inc.
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THE CONFIDENTIAL PORTIONS HAVE BEEN SO OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
EXHIBIT 2-1
STOCK ACQUISITION AGREEMENT
BY AND AMONG
ROCHESTER TELEPHONE CORPORATION,
AMERICAN SHARECOM, INC.,
STEVEN C. SIMON
AND JAMES J. WEINERT
THIS STOCK ACQUISITION AGREEMENT ("Agreement"), is dated as
of November 29, 1994, by and among ROCHESTER TELEPHONE
CORPORATION, a New York transportation corporation ("Rochester"),
AMERICAN SHARECOM, INC., a Minnesota corporation, ("ASI"), and
Steven C. Simon ("Simon") and James J. Weinert ("Weinert"),
(Simon and Weinert being known together herein as the "Sellers").
W I T N E S S E T H :
WHEREAS, Rochester, the Sellers and ASI have indicated their
mutual desire that Rochester should acquire all of the issued and
outstanding stock of ASI (the "Acquisition"), upon the terms and
conditions set forth in this Agreement; and
WHEREAS, the Sellers are the holders of record of 100% of
the issued and outstanding $.01 par value common stock of ASI
authorized issued and outstanding (the "ASI Stock"), and by their
signatures below, inter alia, agree to convey all of their
shares to Rochester.
NOW, THEREFORE, the parties hereto hereby represent,
warrant, covenant and agree as follows:
ARTICLE I. CONVEYANCE OF STOCK
Subject to the terms and conditions provided in this
Agreement, the Sellers agree to transfer to Rochester all of
their right, title and interest in and to the shares of the ASI
Stock owned by them at the Closing (as defined herein) in
consideration of (i) the issuance to them (allocated to each
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Seller on the basis of his percentage ownership of the ASI Stock
(the "Percentage Interest") of 8,710,000 shares of the $1.00 par
value common stock of Rochester Telephone Corporation (the
"Rochester Stock"), less the number of shares of Rochester Stock
which are to be deposited by each Seller into escrow in
accordance with Section 8.17 of this Agreement and (ii) an
interest in the Escrow Fund (as defined in Section 8.17 below)
equal to the applicable Percentage Interest.
ARTICLE II. CLOSING
The closing of the Acquisition (the "Closing") shall take
place at Rochester's offices in Rochester, New York at 10:00 a.m.
within ten business days after the date on which the last of the
conditions described in Articles VII, VIII and IX to be satisfied
is satisfied or at such other time and place as shall be mutually
agreed upon by the parties (the "Closing Date").
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE SELLERS AND
ASI
As an inducement for Rochester to enter into this Agreement,
ASI, and each of the Sellers hereby jointly and severally
represent, warrant, covenant and agree with and to Rochester, as
follows:
3.1 Incorporation. ASI is a privately held corporation
duly organized and validly existing and in good standing under
the laws of the State of Minnesota, having been incorporated in
said State on May 28, 1980, under the name Sharecom, Inc. ASI
has full corporate power and corporate authority to carry on its
business as it is now being conducted, to own and operate its
assets, business and properties, to conduct its business as now
conducted by it, to enter into this Agreement and to perform its
obligations hereunder. Annexed hereto as Schedule 3.1 and made a
part hereof is a complete and correct copy of the Articles of
Incorporation and Bylaws (together with all amendments thereto
and restatements thereof) of ASI.
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3.2 Capitalization of ASI; Corporate Documents. ASI has
an authorized capital stock consisting of 10,000,000 shares of
common stock, 100,000 of which are issued and outstanding, with a
$.01 par value (the "ASI Stock"), of which no shares are held in
the treasury of ASI. There are no other classes of equity,
options, warrants, calls, rights or commitments or any other
agreements of any character relating to the sale, issuance or
voting of any shares of the ASI Stock, or any securities
convertible into or evidencing the right to purchase any shares
of the ASI Stock. All of the issued and outstanding stock of ASI
is owned by the Sellers. Annexed hereto as Schedule 3.2 and made
a part hereof is a complete and correct description of the
ownership by the Sellers of the ASI Stock, including the number
of shares held by each Seller and the certificate numbers of each
of the stock certificates issued to the Sellers and the date of
such issuance, as shown on ASI's books and records at September
30, 1994.
3.3 Title to ASI Stock. Except for shares of the ASI
Stock pledged as security for that certain Revolving and Term
Loan Credit Agreement between ASI and Norwest Bank Minnesota,
National Association, dated as of February 2, 1989, as amended,
each of the Sellers has good and marketable title to, and owns
and will continue to own free and clear of all claims, liens,
pledges, options and other encumbrances, all of the ASI Stock
listed in Schedule 3.2 as being owned by him. All of the ASI
Stock is validly issued, fully paid, non-assessable with no
personal liability attaching to the ownership thereof and has not
been issued in violation of the pre-emptive rights of any other
stockholders.
3.4 Status of ASI Stock. None of the ASI Stock is
subject to any voting trust or any other agreement regarding the
voting of such shares or any other agreement and the ASI Stock
shall be transferred to Rochester at the Closing free and clear
of all claims, liens, including inheritance or estate tax liens,
pledges, options or other encumbrances.
3.5 Capacity of ASI Stock Owners. Neither Seller is
under any present legal disability to enter into and perform this
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Agreement. Each such Seller or his personal representative will
have full power and authority to perform all of his obligations
under this Agreement as of the Closing.
3.6 No Right of First Refusal. Neither Seller nor ASI
is a party to or restricted by or obligated under any contract or
agreement which might be violated by making or performing any
part of this Agreement, including but not limited to rights of
first refusal pursuant to any shareholders or any other
agreement.
3.7 Financial Statements. (i) The audited Consolidated
Balance Sheets of ASI as of July 31, 1992 and 1993 and the
unaudited Balance Sheet of ASI as of September 30, 1994 (the
"Balance Sheets"), and (ii) the related Consolidated Statements
of Income and Retained Earnings and the Consolidated Statements
of Cash Flows and the related Statements of Income and Retained
Earnings and the Statements of Cash Flows for the fiscal years
and periods then ended of ASI, together with the notes thereon,
certified by the independent certified public accountants of ASI,
have been delivered by ASI to Rochester. Such audited financial
statements and notes were prepared in accordance with generally
accepted accounting principles ("GAAP") consistently applied
during the periods involved, are in accordance with the books and
records of ASI, contain and reflect adequate reserves for (i) all
liabilities or obligations of any nature, whether absolute,
contingent or otherwise, in accordance with GAAP and (ii) all
reasonably anticipated losses and costs in excess of expected
revenue, and present fairly the financial position of ASI, as of
such dates and for such periods. All transactions between ASI
and the Sellers related to the business or operations of ASI
(other than as related to compensation of either of the Sellers)
have been identified in such audited financial statements.
Except as set forth in Schedule 3.7, attached hereto and made a
part hereof, the unaudited financial statements as of and for the
period ended September 30, 1994 have been similarly prepared,
contain and reflect adequate reserves for (i) all liabilities or
obligations of any nature, whether absolute, contingent or
otherwise, in accordance with GAAP and (ii) all reasonably
anticipated losses, and present fairly the financial condition
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and results of operations of ASI as of such date and for such
period, except for the lack of explanatory footnote disclosures
required by GAAP. Such footnote disclosures, if included with
the financial statements at and for the 11 month period ended
September 30, 1994, would be substantially similar in description
and content to the footnote disclosures in the audited financial
statements for the fiscal year ended July 31, 1993. All
transactions between ASI and the Sellers related to the business
or operations of ASI (other than as related to compensation of
either of the Sellers) have been identified in such unaudited
financial statements. For purposes of this Agreement, the
Balance Sheet of ASI at September 30, 1994, is sometimes
referred to as the "Balance Sheet" and the date thereof is
referred to as the "Balance Sheet Date." ASI shall deliver to
Rochester (i) the audited financial statements of ASI for the
fiscal year ended October 31, 1994, no later than January 31,
1995; and (ii) any interim unaudited compiled financial
statements of ASI for each fiscal quarter thereafter no later
than 45 days after the end of each such fiscal quarter until the
Closing shall have occurred. Such financial statements will be
prepared in accordance with GAAP applied on a consistent basis
during the periods involved, will present fairly the financial
condition and results of operations of ASI as of such dates and
for such periods, and will be in accordance with the books and
records of ASI.
3.8 Business Since September 30, 1994. Except as set
forth on Schedule 3.8, attached hereto and made a part hereof,
since the Balance Sheet Date, there has not been:
3.8.1 Any material adverse change in the financial
condition, operations, business or prospects of ASI, including,
but not limited to, any state or federal regulatory proceedings
which could culminate in an order or other action which could
have such an adverse change, other than reasonably foreseeable
changes resulting from the implementation in California of
intraLATA toll competition, but excluding generally known
industry trends and competitive conditions affecting the industry
generally;
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3.8.2 Any material physical damage or destruction,
whether or not covered by insurance, adversely affecting the
properties, business, or operations of ASI;
3.8.3 Any labor dispute or threat thereof or any
attempt to organize or reorganize the employees of ASI for the
purpose of collective bargaining;
3.8.4 Any direct or indirect redemption, purchase or
other acquisition by ASI of any of the ASI Stock, or declaration
of or payment or distribution of any kind of cash or other assets
to either of the Sellers other than the payment of dividends as
provided elsewhere in this Agreement;
3.8.5 Any employment, severance, consulting or other
compensation contract entered into by ASI with any director,
officer or employee, or any increase of compensation payable or
to become payable to any of its officers, employees or agents,
except for increases in compensation in the ordinary course of
business;
3.8.6 Any communication, whether oral or written, to
ASI or the Sellers from ASI's customers or suppliers or agencies
regulating ASI, nor does ASI or either of the Sellers, after
making due inquiry, have any knowledge of any potential
development affecting ASI which would reasonably lead it or any
of them to expect a material adverse change in ASI's business;
3.8.7 Any satisfaction or discharge of any lien by
ASI or payment by ASI of any obligation or liability, other than
an obligation or liability included in the Balance Sheet of ASI,
current liabilities incurred since the Balance Sheet Date in the
ordinary course of business, liabilities incurred in carrying out
the transactions contemplated by this Agreement and obligations
and liabilities under the contracts and agreements listed in
Schedule 3.16 hereof;
3.8.8 Any guaranty, endorsement or indemnification by
ASI of the obligations of any third person, firm or corporation;
3.8.9 Any sale or transfer of any assets or
cancellation by ASI of debts or claims having a value, in the
aggregate, of more than $10,000, except, in each case, in the
ordinary course of business;
3.8.10 Any knowing waiver by ASI of any rights having
a value in excess of $10,000;
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3.8.11 Any transaction entered into, other than in
the ordinary course of business;
3.8.12 Any mortgage, pledge or lien or other
encumbrance of any of its assets, tangible or intangible; or
3.8.13 Any assignment, sale or transfer of any
patent, trademark, trade name, trade secret, copyright or other
intangible asset.
3.9 Litigation, Claims. Except as set forth in Schedule
3.9 annexed hereto and made a part hereof, there are no actions,
suits, proceedings or investigations (whether or not purportedly
on behalf of ASI) pending or threatened against or affecting ASI
or the Sellers' ability to comply with their obligations under
this Agreement at law or in equity or admiralty, or before or by
any federal, state, municipal or other governmental department,
commission, board, agency or instrumentality, domestic or foreign
which could have a material adverse effect on ASI, nor has any
such action, suit, proceeding or investigation been pending
during the twelve-month period preceding the date of this
Agreement. ASI is not operating under or subject to, or in
default with respect to, any order, writ, injunction or decree of
any court or federal, state, municipal or other governmental
department, commission, board, agency or instrumentality,
domestic or foreign. ASI and the Sellers shall give Rochester
written notice (promptly and not later than the Closing) if,
prior to the Closing, ASI and the Sellers acquire knowledge of
any of the matters set forth in this Section 3.9 or any grounds
therefor.
Other than as set forth on Schedule 3.9, during the past 5
years, there has not been nor is there now pending, any claim(s)
against any person in his or her capacity as either a director or
officer of ASI. The Sellers have no actual knowledge or
information of any act, error, or omission which would give rise
to such a claim. Neither ASI nor the Sellers have been involved
in or have knowledge of any facts or circumstances involving the
following which would give rise to such a claim:
(i) Antitrust, copyright, tradename, trademark or patent
claims or litigation;
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(ii) Charges in any civil or criminal action or
administrative proceeding involving a violation of any federal or
state security law or regulation;
(iii) Charges in any civil or criminal action or
administrative proceeding involving a violation of any federal or
state antitrust or fair trade law;
(iv) Actions involving representative actions, class
actions or derivative suits.
3.10 Compliance with Laws. Except as set forth on
Schedule 3.10, ASI has not received written notice and neither
ASI nor either of the Sellers has any knowledge, having made due
inquiry, of any violation by ASI of its tariffs or of laws,
regulations and orders from any governmental entity having
authority to enforce such tariffs, laws, regulations and orders,
and the Sellers do not have any actual knowledge, having made due
inquiry, that any requirements of insurance carriers, applicable
to its business are not being adhered to. The present uses by
ASI of its properties do not violate any such laws, regulations,
orders or requirements. To Sellers' actual knowledge, having
made due inquiry, no consent or approval by any governmental or
quasi-governmental authority, other than the approval of the
Federal Communications Commission, the utility regulatory
commissions in the States of Minnesota, Wisconsin, Washington,
Oregon, California, Wyoming, Montana, Nevada, Colorado, Illinois,
North Dakota, South Dakota, Utah, Iowa and Idaho (together, the
"Commissions") and compliance with applicable federal and state
securities and corporation laws, is required in connection with
the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby.
3.11 Patents, Trademarks, Miscellaneous Intellectual
Property. Schedule 3.11, which is annexed hereto and made a part
hereof, sets forth a correct and complete list of all copyrights,
patents, trademarks, trade names, processes, inventions and
formula applied for, issued to or owned by ASI or under which ASI
is licensed or franchised, all of which are valid, in good
standing and uncontested. Except as set forth on Schedule 3.11,
ASI possesses adequate rights, licenses or other authority to use
all copyrights, patents, inventions, formula, processes (secret
or otherwise), trademarks and trade names necessary to conduct
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its businesses as presently conducted or presently proposed to be
conducted. ASI has not received any notice or other information
with respect to any alleged infringement or unlawful use of any
software license, copyright, patent, trademark, trade name,
process, invention or formula or other intangible property right
owned by it or by others. No director or officer of ASI has any
interest in any such copyright, patent, trademark, trade name,
process, invention or formula. ASI has not granted any
outstanding licenses or other rights and has no obligations to
grant licenses or other rights with respect to any copyright,
patent, invention, formula, process, trademark or trade name
listed in Schedule 3.11, except as specifically stated in
Schedule 3.11.
3.12 Insurance. Schedule 3.12, which is annexed hereto
and made a part hereof, is a correct and complete list of all
insurance held by ASI including the policy number, name of
carrier, coverage, term, expiration date and premium. ASI has
its buildings, plants and properties, including, but not limited
to telecommunications equipment and inventories, insured for its
actual cash value, but not exceeding the amount it would cost to
repair or replace such properties, against loss or damage by fire
and all other hazards and risks of the character usually insured
against by persons operating similar properties in the localities
where such properties are located under valid and enforceable
policies issued by insurers of recognized responsibility. Such
insurance coverage will be continued in full force and effect
through the Closing. ASI has not been refused any insurance by
an insurance carrier to which it has applied for insurance during
the past three years.
3.13 Indebtedness. Schedule 3.13, which is annexed
hereto and made a part hereof, is a correct and complete list of
all instruments, agreements or arrangements pursuant to which ASI
has borrowed any money, guaranteed or incurred any indebtedness
or established any line of credit which represents any liability,
contingent or otherwise, of ASI on the date hereof. True and
complete copies of all such written instruments, agreements or
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arrangements have been delivered to Rochester prior to the date
of this Agreement.
3.14 Correct Records. The financial records, ledgers,
account books, minute books, stock certificate books, stock
registers, and other corporate records of ASI are current,
correct and complete in all material respects and all signatures
therein are the true signatures of the persons who are purported
to have signed.
3.15 Contracts. Schedule 3.15, which is annexed hereto
and made a part hereof, lists all of the written contracts,
plans, agreements, arrangements and leases, true and complete
copies of which have been furnished to Rochester as of the date
hereof, and describes each oral contract, plan, agreement,
arrangement and lease to which ASI is a party, including but not
limited to: (i) each contract for the future purchase of
materials, services, supplies or equipment which (a) has a term
in excess of one year or (b) obligates ASI to pay, in one
installment or in the aggregate over its term or one year,
whichever is shorter, an amount in excess of $100,000; (ii) each
contract with a customer made in the ordinary course of business
which (a) has a term in excess of one year or (b) generates
revenues for ASI over its term or in any one 12 month period,
whichever is shorter, in excess of $50,000; (iii) each contract
not made in the ordinary and usual course of business; (iv) each
employment, severance and consulting contract; (v) each contract
with any labor union or other labor organization; (vi) each
guarantee and accommodation; (vii) each license and franchise
relating to the business of ASI; (viii) each lease of real and
personal property which (a) has a term in excess of one year or
(b) obligates ASI to pay, in one installment or in the aggregate
over its term or one year, whichever is shorter, an amount in
excess of $50,000; and (ix) each contract and agreement with
affiliates of ASI, including the Sellers. Except as set forth on
Schedule 3.15 hereto, ASI has performed all obligations required
to be performed by it to date and has not breached and is not in
default under any agreement listed in Schedule 3.15 or to which
it is a party or by which it is bound, and all of the same are
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enforceable in accordance with their terms.
3.16 Employee Benefit Plans.
3.16.1 Annexed hereto as Schedule 3.16 and made a
part hereof is a true and complete list of all pension,
retirement, bonus, profit-sharing, deferred compensation,
workers' compensation insurance, group insurance and other
employee pension or welfare benefit plans of any type whatsoever
entered into or maintained by ASI. All pension benefit plans
entered into or maintained by ASI are qualified with the Internal
Revenue Service ("IRS"), true and correct copies of which,
together with copies of the most recent IRS determination letter
for each plan have been provided to Rochester before the date of
this Agreement. ASI does not contribute to any employee benefit
plan including any multi-employer benefit plan, except as listed
on Schedule 3.16.
3.16.2 ASI is in compliance with and has filed,
published and disseminated all reports, documents, statements and
communications required to be filed, published or disseminated
under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and the rules and regulations promulgated
under ERISA, and there is no additional funding requirement for
any reason, including but not limited to, amendments or
terminations of any employee benefit plan of ASI.
3.16.3 None of the plans listed on Schedule 3.16 nor
any fiduciary thereof has engaged in transactions which might
subject any of the plans or any fiduciary thereof, of any party
dealing with them, to the tax or penalty on prohibited
transactions imposed by Section 4975 of the Internal Revenue Code
or to a civil penalty imposed by Section 502 of ERISA.
3.16.4 No such plan has been completely or partially
terminated since September 2, 1974.
3.16.5 None of the plans or trusts has incurred any
accumulated funding deficiency, as such term is defined in
Section 412 of the Internal Revenue Code, whether or not such
deficiency has been waived.
3.17 Titles, Real Property Matters. Schedule 3.17, which
is annexed hereto and made a part hereof, contains descriptions
by categories of ASI's real property (including all plants and
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structures located thereon) as of the date of this Agreement.
Except as set forth in Schedule 3.17, ASI has good and marketable
title in fee simple to such properties, free and clear of all
liens and encumbrances and use restrictions. ASI will obtain
title insurance policies on all real estate listed as owned in
fee simple on Schedule 3.17 hereto, prior to the Closing. ASI
owns or leases all the furniture, equipment and leasehold
improvements located in the structures referred to in Schedule
3.17. All other assets and property used in the business of ASI,
and all assets and property reflected in the Balance Sheets, or
acquired after the Balance Sheet Date (other than assets or
property sold or otherwise disposed of in the ordinary course of
its business subsequent to such date) are in each case free and
clear of all security interests, mortgages, pledges, liens,
conditional sales, agreements, leases, encumbrances or charges of
any nature whatsoever except as expressly stated in Schedule
3.17. All real estate owned or leased by ASI, their uses,
appurtenances and improvements substantially comply with all
applicable ordinances and regulations, building, and zoning laws.
The buildings, machinery and equipment of ASI are in good and
serviceable condition, reasonable wear and tear excepted.
3.18 Consents. Except for applicable requirements under
the Communications Act, state communications or utility
regulatory laws, the Exchange Act, state securities or blue sky
laws, and the expiration or termination of the waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act (the "HSR
Act"), no consent, approval or authorization of, or filing,
registration, qualification, declaration or designation with, any
governmental authority is required on the part of ASI or the
Sellers as a condition to the valid execution, delivery and
performance of this Agreement by ASI and by the Sellers.
3.19 No Defaults. Subject to applicable requirements
under the Communications Act, state communications laws, the
Exchange Act, state securities or blue sky laws, and the
expiration or termination of the waiting period under the HSR
Act, the execution, delivery and performance by ASI of this
Agreement will not, in any material respect (with respect to
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clauses (ii) through (iv), inclusive, of this Section 3.19), (i)
conflict with the Articles of Incorporation, as amended, or By-
laws of ASI; (ii) conflict with, 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, modification or acceleration) under,
any of the terms, conditions or provisions of any trust
agreement, voting agreement, stockholders agreement, voting
trust, note, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other
instrument or obligation of any kind affecting ASI or the Sellers
or to which ASI or the Sellers are a party or by which any of the
properties or assets of ASI are or may be bound; (iii) violate
any requirement of law applicable to ASI; or (iv) violate any
order, injunction, judgment or decree of any court or other
governmental authority or any determination of an arbitrator
applicable to ASI or any of ASI's properties or assets.
3.20 Qualification/Subsidiaries and Other Interests.
Neither the nature of ASI's business nor the location of its
properties require that it be duly certified, licensed or
qualified to do business in any state or jurisdiction other than
the States of Minnesota, Wisconsin, Wyoming, Montana,
Washington, Oregon, California, Nevada, Colorado, Illinois, North
Dakota, South Dakota, Utah, Iowa and Idaho (and Arizona, if the
pending application for qualification is accepted) (together, the
"States"). ASI is duly qualified, certified or licensed in each
such state where it conducts business.
ASI has no subsidiary corporations or any other interest in
any corporation, partnership, association or joint venture, other
than as described on Schedule 3.20, attached hereto and made a
part hereof.
3.21 Brokers. There is no broker or finder or other
person who would have any valid claim against the Sellers or ASI
for a commission or brokerage in connection with this Agreement
or the transactions contemplated hereby and ASI has not retained
or employed any such broker, finder or person as such, nor taken
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any action which would give any person any valid claim against
any party hereto for such a commission or brokerage.
3.22 Employees. Schedule 3.22, which is annexed hereto
and made a part hereof, sets forth the names, and present annual
salaries, wages, commissions and bonuses ("Compensation") of all
persons employed by ASI. Such Schedule also sets forth the names
of all directors and officers of ASI and a description of any
agreement with respect to the election or tenure of any of them
as such. Prior to the Closing, and except as set forth in
Schedule 3.22, without the written consent of Rochester thereto,
ASI will not increase the rate of Compensation of or grant any
severance, bonus or other employee benefit to any employee, or
commit itself to or announce the granting of any such increase,
bonus or benefit in Compensation to become effective on or after
the Closing. Prior to the Closing, ASI will obtain the
resignation, effective automatically upon consummation of the
transactions contemplated hereby, of any of the directors and
officers of ASI as shall be specified by Rochester. On or before
the Closing Date, ASI shall deliver to Rochester a list of ASI's
employees as of the end of the fiscal quarter immediately
preceding the Closing, indicating the following information for
each employee:
3.22.1 His or her Compensation and any applicable
severance arrangement;
3.22.2 whether remunerated on an hourly, weekly, or
monthly basis;
3.22.3 date of most recent commencement of service
with ASI; and
3.22.4 accrued holiday, vacation, sick leave, long
service entitlement (if any) and permitted time-off due as
compensation for additional time worked.
3.23 Corporate and Sellers' Action. This Agreement has
been duly authorized, executed and delivered by ASI and the
Sellers and constitutes a legal, valid and binding agreement of
ASI and the Sellers, enforceable against them in accordance with
its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
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similar laws relating to or affecting creditors generally, by
general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law)
or by an implied covenant of good faith and fair dealing.
3.24 Liabilities. As of September 30, 1994, ASI had no
material liabilities, absolute or contingent, which are not shown
on the Balance Sheet. All liabilities, absolute or contingent,
of ASI incurred subsequent to September 30, 1994, will have been
incurred only in the ordinary course of business and ASI will,
prior to the Closing, have obtained the consent of Rochester to
incur any single such liability incurred subsequent to the date
of this Agreement in excess of $25,000.
3.25 Accounts Receivable and Non-Current Receivables.
The accounts, notes and other receivables, whether current or
non-current, of ASI shown on the most recent Balance Sheet before
the Closing, and all such receivables of ASI as at the Closing,
were and shall be good and collectible, subject only to any
allowance for doubtful accounts, losses or reserves for returns
which may be provided for in such Balance Sheet or, in the case
of receivables subsequently created, on the books of ASI as of
the Closing.
3.26 Tax Returns. Except as set forth in Schedule 3.26,
annexed hereto and made a part hereof, all federal income tax
returns, and other federal tax returns of every nature, and all
state, county and local tax returns and declarations of estimated
tax or estimated tax deposit forms required to be filed by ASI,
have been duly filed, and ASI has paid all taxes which have
become due and owing or pursuant to any assessment received by it
and has paid all installments of estimated tax due. Where such
returns and reports have not been audited and approved or
settled, there has not been any waiver or extension of any
applicable statute of limitations, and ASI has not received any
notice of deficiency or adjustment. The amounts shown as
provisions for taxes on the Balance Sheet are sufficient for the
payment of all respective federal, state, county and local taxes.
All taxes and other assessments and levies which ASI is
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<PAGE> 16
required by law to withhold or to collect have been duly withheld
and collected, and have been paid over to the proper governmental
authorities or are held by ASI in separate bank accounts for such
payment. All statements and reports required to be filed under
any Chapter of the Internal Revenue Code of 1986, as amended, by
ASI have been duly filed.
Except as described on Schedule 3.26, attached hereto and
made a part hereof, to the best of the Sellers' knowledge, having
made due inquiry, there is not now pending or under contemplation
any audit of any payment, return or report made or filed by ASI
or of any claimed failure to pay or report any kind of tax which
may be assessed by any taxing authority against ASI.
ASI is a Subchapter S corporation, within the meaning of the
Code.
3.27 Banks. Schedule 3.27, which is annexed hereto and
made a part hereof, is a correct and complete list setting forth
the name of each bank in which ASI has an account or safe deposit
box, the names of all persons authorized to draw thereon or to
have access thereto, and the name of each person holding a power
of attorney from ASI.
3.28 Disclosure by the Sellers and ASI. No
representation or warranty made by the Sellers or ASI in this
Agreement and no statement made in any certificate to be
delivered at the Closing, Exhibit or Schedule furnished or to be
furnished in connection with the transactions herein contemplated
contains or will contain any untrue statement of a material fact
or omits or will omit to state any material fact necessary to
make such representation or warranty or any such statement not
misleading to a prospective purchaser of the ASI Stock who is
seeking full information with respect to ASI. No disclosure of
information with respect to any warranty or representation
contained in this Agreement, or other matters contemplated by
this Agreement, shall be deemed to have been made or given unless
it expressly appears in this Agreement, or in any document
submitted pursuant to a specific requirement of this Agreement.
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3.29 Conflict of Interest. Except as set forth on
Schedule 3.29, hereto, neither the Sellers nor any director,
officer, or employee of ASI or any relative of any of them, has
(i) loaned to or guaranteed the loan of a third party to ASI or
borrowed any money from ASI or (ii) any interest in any property,
real or personal whether owned or leased, tangible or intangible,
including but not limited to, software, inventions, patents,
trade names or trademarks used in connection with or pertaining
to the business of ASI or any lender, supplier, customer, sales
representatives or distributor of ASI; provided, however, that
the Sellers or such director, officer, or employee or relative
thereof shall not be deemed to have such interest solely by
virtue of the ownership of less than five percent (5%) of any
stock or indebtedness of any publicly-held company, the stock or
indebtedness of which is traded on a recognized stock exchange.
3.30 Expenses. The legal expenses allocated to ASI in
connection with the transactions contemplated by this Agreement
shall not exceed in the aggregate of $50,000, unless ASI shall
have received written approval to exceed such fee amount from
Rochester, which approval shall not be unreasonably withheld.
All other expenses allocated to ASI or incurred by it in
connection with this Agreement shall not exceed $15,000. As soon
as practicable after the Closing, ASI shall submit to Rochester a
list of such expenses incurred up to the Closing.
3.31 Securities Law Reporting. ASI is not now and has
never been subject to the reporting requirements of the
Securities and Exchange Commission ("SEC").
3.32 Environmental Matters. ASI is in compliance with
all applicable laws and regulations related to the environment,
health and safety, all required governmental permits have been
obtained and are in effect, and no on-site storage, treatment or
disposal of hazardous waste or material has been made (except in
compliance with applicable laws and regulations). There are no
pending actions, proceedings, or notices of potential action and
ASI has no knowledge of any facts that may lead to actions,
proceedings, or notices of potential action from any governmental
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<PAGE> 18
agency regarding the condition of the properties leased by or
personal property owned by ASI under environmental, health or
safety laws, which would have a materially adverse effect on
ASI's business. ASI has lawfully disposed of its waste and no
pending or threatened proceedings exist concerning waste disposal
by ASI. There are no underground storage tanks, PCBs, asbestos,
radon gas, harmful nuclear radiation, or hazardous wastes present
on the properties leased by or personal property owned by ASI.
3.33 Americans With Disabilities Act. ASI and the
Sellers have no actual knowledge of any violations of the United
States' Americans With Disabilities Act's mandates and
obligations, including but not limited to, those regulation
telecommunications providers, facilities accessibility and
employment practices.
3.34 Securities Laws Compliance. Each Seller is
acquiring the Rochester Stock for his own account for investment,
not as a nominee or agent, and not with a view to the resale or
distribution of the Rochester Stock or any part thereof, and no
Seller has a plan or intention of selling, granting any
participation in, or otherwise distributing the same. By
executing this Agreement, each Seller further represents that
there is no contract, undertaking, agreement or arrangement with
any person for resale in connection with a distribution to any
person with respect to any of the Rochester Stock. Each Seller
acknowledges that the offering of the Rochester Stock, other than
the Registered Shares (as defined in Section 7.6 below), pursuant
to this Agreement will not be registered under the Securities Act
of 1933, as amended (the "Securities Act") or any state
securities or blue sky law, on the grounds that the offering and
sale of the Rochester Stock contemplated by this Agreement are
exempt from registration pursuant to exceptions available under
such laws, and that Rochester's reliance upon such exemptions is
predicated upon each Seller's representations set forth in this
Agreement. Each Seller acknowledges and understands that the
Rochester Stock, other than the Registered Shares, must be held
for an indefinite period of time unless the Rochester Stock is
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<PAGE> 19
subsequently registered under the Securities Act and/or
applicable state securities or blue sky laws or an exemption from
such registration is available.
3.35 Status of Value Drivers. The written materials,
data and documents provided by ASI and the Sellers to Rochester
related to ASI's historical revenue generation, customer
retention and acquisition, costs of access and other network
costs remain true as of the date hereof and the results of ASI's
operations as of the date hereof are consistent with such written
materials, data and documents. All written projections of future
operations provided by ASI and the Sellers to Rochester are
consistent with such written materials, data and documents and
are based upon assumptions of future conditions which ASI and the
Sellers believe are reasonable.
3.36 Distribution History. Attached hereto and made a
part hereof as Schedule 3.36 is a summary of the historical and
projected distributions of ASI's "Free Cash Flow" to the Sellers.
Such distributions were not made nor planned to be made in
contemplation of the transactions described in this Agreement.
ARTICLE IV. ROCHESTER'S REPRESENTATIONS AND WARRANTIES
Rochester represents and warrants that:
4.1 Incorporation. Rochester is a transportation
corporation duly organized, validly existing and in good standing
under the laws of the State of New York and the location of its
properties and its business activities do not require that it
qualify as a foreign corporation in any jurisdictions other than
Minnesota, Georgia, New Jersey and Pennsylvania, in which it is
so qualified.
4.2 No Defaults. Neither the execution and delivery of
this Agreement nor the consummation of the transactions
contemplated hereby is an event which of itself or with the
giving of notice or the passage of time, or both, could
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<PAGE> 20
constitute, in any material respect (with respect to clauses (i)
and (iii) of this Section 4.2), a violation of or conflict with
or result in any breach of, or default under the terms,
conditions or provisions of, (i) any judgment, law or regulation
(assuming receipt of the approvals referenced in Section 3.10
hereof) or (ii) Rochester's Certificate of Incorporation or
Bylaws, or (iii) any agreement or instrument to which Rochester
is a party or by which it is bound or could result in the
creation or imposition of any lien, charge or encumbrance of any
nature whatsoever on the property or assets of Rochester, and no
such event of itself or with the giving of notice or the passage
of time, or both, will result in the acceleration of the due date
of any obligation of Rochester.
4.3 Corporate Action of Rochester. This Agreement has
been duly authorized, executed and delivered by Rochester and
constitutes a legal, valid and binding agreement of Rochester,
enforceable against it in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or
affecting creditors generally, by general equity principles
(regardless of whether such enforceability is considered in a
proceeding in equity or at law) or by an implied covenant of good
faith and fair dealing.
4.4 Disclosure by Rochester. No representation or
warranty made by Rochester in this Agreement, and no statement
made in any certificate to be delivered at the Closing, Exhibit
or Schedule furnished or to be furnished in connection with the
transactions herein contemplated, contains or will contain any
untrue statement of a material fact or omits or will omit a
material fact necessary to make the statements contained therein
or herein not misleading.
4.5 Brokers. There is no broker or finder or other
person who would have any valid claim against Rochester for a
commission or brokerage in connection with the Agreement or the
transactions contemplated hereby (other than Lazard Freres & Co.)
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<PAGE> 21
and Rochester has not retained or employed any such broker,
finder or person as such, nor taken any action which would give
any person any valid claim against any party hereto for such a
commission or brokerage.
ARTICLE V. COVENANTS OF THE SELLERS AND ASI PENDING CLOSING
The Sellers and ASI jointly and severally covenant and agree
that from the date hereof to and including the Closing:
5.1 Maintenance of Business. ASI shall continue to
carry on its business, maintain its plants and equipment and keep
its books of account, records and files in substantially the same
manner as heretofore, except that ASI shall seek Rochester's
consent prior to incurring any expense other than in the ordinary
course of business or capital expenditure which individually or
in the aggregate would exceed $100,000. ASI will maintain in
full force and effect insurance policies now in effect. ASI may,
however, continue to carry on such activities, plans, capital and
operating programs which were approved by it prior to the date
hereof, provided that such activities, plans and programs shall
not involve expenditures exceeding $50,000 for each such
activity, plan or program. If any such activities, plans or
programs exceed $50,000 they shall, prior to the execution of
this Agreement, have been submitted to Rochester in detail and in
writing, and shall have been approved by Rochester.
5.2 Negative Covenants. Without the prior written
consent of Rochester, ASI shall not, and the Sellers shall do all
things and take all reasonable and proper action to provide that
ASI shall not:
5.2.1 Issue, sell, purchase or redeem, or grant
options to purchase or otherwise agree to sell, purchase or
redeem any shares of its capital stock or any other securities of
ASI;
5.2.2 Amend its Articles of Incorporation or adopt or
amend its Bylaws;
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<PAGE> 22
5.2.3 Incur or prepay any liability for borrowed
money, short term debt or long term debt (as those terms are
defined in GAAP), other than in the ordinary course of business
and consistent with past practices;
5.2.4 Pay or guarantee any obligation or liability
other than obligations or liabilities reflected in the Balance
Sheets, when due, liabilities incurred since the Balance Sheet
Date in the ordinary course of business and obligations under
contracts and agreements referred to in Schedules annexed hereto
or entered into in the ordinary course of business;
5.2.5 Adopt or modify any severance, consulting,
bonus, pension, profit sharing or other compensation plan or
enter into any contract of employment;
5.2.6 Enter into or modify any contract or
commitment, incur any liability, absolute or contingent, waive or
fail to enforce any right or enter into any other transaction,
other than in the ordinary course of business;
5.2.7 Take any action that would or might reasonably
be expected to result in any representation or warranty set forth
in this Agreement being or becoming untrue in any respect or in
any of the conditions to the consummation of the transactions
contemplated by this Agreement set forth in Article VIII hereof
not being satisfied;
5.2.8 Have made or become obligated to make any
dividend payment or other distribution to the Sellers, other than
dividends or distributions in the approximate amounts shown on
Schedule 3.36 attached hereto and made a part hereof. If ASI's
Subchapter S pretax income prior to the Closing Date is more or
less than the amounts projected on Schedule 3.36, ASI will
increase or decrease distributions in accordance with the policy
expressed on Schedule 3.36, but such distributions between June
30, 1994, and the Closing Date will not exceed, in the aggregate,
the planned distribution of 93.9% of Subchapter S pretax income
reflected on Schedule 3.36, so as to permit the transactions
contemplated hereby to be accounted for as a pooling of
interests; or
5.2.9 Enter into any contracts to purchase long
distance service from interexchange carriers.
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<PAGE> 23
5.3 Organization, Good Will. ASI shall preserve its
business organization intact, retain the services of its present
officers and use its best efforts to retain substantially as at
present its employees, and preserve the good will of its
suppliers, customers and others having business relations with
it.
5.4 Access to Plants, Files and Records. ASI and the
Sellers acknowledge that as of the date this Agreement is
executed Rochester has not completed Due Diligence (defined as
those actions and investigations described in subsections (i)
through (iv) below). Therefore, at the reasonable request of
Rochester, ASI shall, from time to time, give or cause to be
given to Rochester, its officers, employees, accountants, counsel
and authorized representatives full access to (i) all of the
property, accounts, books and other financial records, minute
books, deeds, title papers, insurance policies, licenses,
agreements, contracts, commitments, tax returns, records and
files of every character, employees, equipment, machinery,
fixtures, furniture, vehicles, notes and accounts payable and
receivable and inventories of ASI; (ii) all such other
information concerning the affairs of ASI as Rochester may
reasonably request(iii) consult with the independent auditors of
and counsel to ASI with respect to all matters, including, but
not limited to, the financial condition of ASI and the audit of
ASI's financial statements and any legal and regulatory matters
affecting ASI; (iv) at Rochester's own cost and expense, the
plant, properties and operations of ASI in order to perform a
Phase I environmental audit (the "Environmental Audit"). The
Environmental Audit, if conducted, shall be instituted within 30
days after this Agreement is fully executed by both parties. A
copy of the report of the Environmental Audit will be delivered
promptly to the Sellers and the Sellers shall be afforded an
opportunity to undertake a Phase II audit, if necessary, to prove
to Rochester's satisfaction that no hazards exist. The Sellers
shall be afforded a 30 day period after discovery to cure any
environmental hazards which the Environmental Audit discloses
exist and Rochester shall keep confidential all information
regarding any such hazards unless legally required to disclose
it.
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<PAGE> 24
5.5 Actions Not Affect Accounting Treatment. Neither
ASI nor either of the Sellers shall take any action which would
disqualify the transactions contemplated by this Agreement from
being accounted for by Rochester as a "pooling of interests".
5.6 Third Party Consents. ASI will obtain or cause to
be obtained the consent of any third party whose consent is
required by ASI or the Sellers in order that the transactions
contemplated by this Agreement may be consummated without
violation of any representation, warranty or covenant made by any
of them in this Agreement; provided, however, that ASI shall not
spend any money or otherwise incur any obligation in order to
obtain any such consent without the prior written approval of
Rochester.
5.7 Securities Laws. ASI and the Sellers will take all
action necessary to permit the transactions contemplated herein
to be consummated without violating the securities laws of the
United States or of any state or commonwealth.
5.8 Notice of Proceedings. ASI will, upon becoming
aware of any order or decree or any complaint praying for an
order or decree restraining or enjoining the consummation of the
Agreement or the transactions contemplated hereunder, or upon
receiving any notice from any governmental department, court,
agency or commission of its intention to institute an
investigation into, or institute a suit or proceeding to restrain
or enjoin the consummation of this Agreement or such
transactions, or to nullify or render ineffective this Agreement
or such transactions if consummated, promptly notify Rochester in
writing of such order, decree, complaint or notice.
5.9 Delivery of ASI's Shareholder Lists. The list of
shareholders in Schedule 3.2 hereof is a true and complete list
setting forth the identity of all of the common shareholders of
ASI, their holdings of all of the stock of ASI, the certificate
number of each share certificate issued to each of them and the
date of such issuance. Prior to the Closing, ASI will deliver an
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<PAGE> 25
updated list of its common shareholders and Rochester may rely
completely on such updated list of shareholders.
5.10 Confidential Information. If, for any reason, the
transactions contemplated by this Agreement are not consummated,
ASI shall not disclose to third parties any confidential
information received from Rochester in the course of
investigating, negotiating and performing the transactions
contemplated by this Agreement; provided, however, that this
provision shall be applicable only with respect to information
received from Rochester and clearly identified as confidential
information, and that nothing shall be deemed to be confidential
information which:
5.10.1 Is known to ASI at the time of disclosure by
Rochester;
5.10.2 Becomes publicly known or available without
the disclosure thereof by ASI or the Sellers in violation of this
Agreement; or
5.10.3 Is rightfully received by ASI from a third
party.
5.11 Transition to RCI Long Distance, Inc.; Network
Matters. Subject to any contractual obligations of ASI to third
parties, ASI and the Sellers shall immediately take all action
reasonably necessary to begin to transition ASI's switched long
distance traffic to RCI Long Distance, Inc. ("RCI") for
termination, provided that all the associated costs of
reconfiguration are borne by RCI and that the rates charged by
RCI to ASI are not more than those currently paid by ASI to other
interexchange carriers for termination. In addition, ASI and the
Sellers shall assist RCI in any network and other issues
identified by RCI as necessary for RCI's future business plans,
including but not limited to the reconfiguration of the ASI
network and permitting RCI to collocate switching equipment in
ASI points of presence.
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ARTICLE VI. COVENANTS OF ROCHESTER PENDING ACQUISITION
Rochester covenants and agrees that:
6.1 Corporate Action. Subject to the provisions of this
Agreement, Rochester will take all necessary corporate and other
action required of it to carry out the transactions contemplated
by this Agreement; provided, however, that nothing in this
Article VI or anywhere else in this Agreement shall require
Rochester to carry out such transactions if a Final Order of a
Commission (as those terms are defined in Section 9.2 of this
Agreement) contains a term, condition or provision which, in
Rochester's sole determination, is unduly burdensome.
6.2 Confidential Information. If, for any reason, the
transactions herein contemplated are not consummated, Rochester
shall not disclose to third parties any confidential information
received from ASI in the course of investigating, negotiating and
performing the transactions contemplated by this Agreement;
provided, however, that this provision shall be applicable only
with respect to information received from ASI and clearly
identified as confidential information, and that nothing shall be
deemed to be confidential information which:
6.2.1 Is known to Rochester at the time of its
disclosure by ASI;
6.2.2 Becomes publicly known or available without
Rochester's disclosure thereof in violation of this Agreement; or
6.2.3 Is rightfully received by Rochester from a
third party.
6.3 Notice of Proceedings. Rochester will, upon
becoming aware of any order or decree or any complaint praying
for an order or decree restraining or enjoining the consummation
of this Agreement or the transactions contemplated hereunder, or
upon receiving any notice from any governmental department,
court, agency or commission of its intention to institute an
investigation into, or institute a suit or proceeding to restrain
or enjoin the consummation of this Agreement or such transactions
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<PAGE> 27
if consummated, promptly notify ASI in writing of such order,
decree, complaint or notice.
ARTICLE VII. CONDITIONS TO THE OBLIGATIONS OF THE SELLERS AND ASI
The obligations of the Sellers and ASI under this Agreement
are, at the option of the Sellers and ASI, subject to the
fulfillment of the following conditions prior to or at the
Closing:
7.1 Representations, Warranties, Covenants.
7.1.1 All representations and warranties of Rochester
contained in this Agreement and in any certificate, Exhibit or
Schedule to be delivered by Rochester pursuant hereto or in
connection with the transactions contemplated hereby shall be
true and accurate in all material respects as of the date when
made and shall be deemed to be made again at and as of the
Closing and shall then be true and accurate in all material
respects;
7.1.2 Rochester shall have performed and complied in
all material respects with each and every covenant, agreement and
condition required by this Agreement to be performed or complied
with by it prior to or at the Closing;
7.1.3 Rochester shall have delivered to ASI a
certificate of an officer of Rochester, dated as of the Closing,
certifying to the fulfillment of the conditions set forth in this
Section 7.1.
7.2 Proceedings. No order of any court or other
governmental agency shall have been issued which enjoins the
consummation of the transactions contemplated by this Agreement.
7.3 Proceedings and Instruments Satisfactory. All
proceedings, corporate or otherwise, to be taken in connection
with the transactions contemplated by this Agreement and all
documents incident thereto shall be satisfactory in form and
substance to the Sellers and Rochester shall have furnished the
Sellers with certified copies of such proceedings and such other
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<PAGE> 28
instruments and documents as the Sellers shall have reasonably
requested.
7.4 Delivery of Rochester Stock. Rochester shall have
delivered to the Sellers certificates representing shares of the
Rochester Stock in an amount determined as provided in Article I
of this Agreement. Such Rochester Stock shall be validly issued,
fully paid and non-assessable, will not be subject to any pre-
emptive rights and will duly listed for trading on the New York
Stock Exchange. Each such certificate (other than the Registered
Shares (as defined in Section 7.6 below)) shall bear the
following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAW OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THEY ARE SO REGISTERED OR UNLESS AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
Such certificates (including, without limitation, any
certificate issued upon transfer or in exchange therefor or in
substitution therefor) shall also bear any legend required under
any applicable state securities or blue sky laws. Rochester may
make a notation on its records or give instructions to any
transfer agents or registrars for the Rochester Stock in order to
implement the restrictions on transfer set forth in this Section
7.4. In connection with any transfer of such Rochester Stock,
the transferor shall provide Rochester with such customary
certificates, opinions and other documents as Rochester may
reasonably request to assure that such transfer complies fully
with applicable securities and other laws. Rochester shall not
incur any liability for any delay in recognizing any transfer of
such Rochester Stock if Rochester in good faith believes that
such transfer may have been or would be in violation in any
material respect of the provisions of the Securities Act of 1933,
as amended, applicable state securities or blue sky laws. After
such time as the legend described by this Section 7.4 is no
longer required on any certificate or certificates representing
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<PAGE> 29
any of the Rochester Stock in the good faith judgment of
Rochester, upon request of a Seller, Rochester shall cause such
certificate or certificates to be exchanged for a certificate or
certificates that do not bear such legend.
7.5 Registration Rights Agreement. Rochester shall have
executed and delivered to the Sellers the Registration Rights
Agreements in substantially the form attached hereto and made a
part hereof as Schedule 7.5.
7.6 Registered Shares. Rochester agrees to use its best
efforts to effect the registration of 261,300 shares of the
Rochester Stock on behalf of Simon and 174,200 shares of the
Rochester Stock on behalf of Weinert (collectively, the
"Registered Shares") under the Securities Act, and, in that
connection, to cause a registration statement with respect to the
Registered Shares to be effective under the Securities Act on the
Closing Date. The parties' rights and obligations in connection
with the registration of the Registered Shares shall be governed
by the Registration Rights Agreement as if each of Simon and
Weinert, as Holders (as defined in the Registration Rights
Agreement), had requested the Company (as defined in the
Registration Rights Agreement) to effect the registration of such
person's Registered Shares pursuant to Section 3(a) of the
Registration Rights Agreement, but such registration shall not be
deemed to be a request for registration for purposes of Section
3(a) of the Registration Rights Agreement.
ARTICLE VIII. CONDITIONS TO THE OBLIGATIONS OF ROCHESTER
The obligations of Rochester under this Agreement are, at
the option of Rochester, subject to the fulfillment of the
following conditions prior to or at the Closing:
8.1 Representations, Warranties, Covenants.
8.1.1 All representations and warranties of ASI and
the Sellers contained in this Agreement and in any certificate,
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<PAGE> 30
Exhibit or Schedule to be delivered pursuant hereto or in
connection with the transactions contemplated hereby, which
Schedule or Exhibit shall not be amended by ASI or the Sellers
without Rochester's prior written consent, shall be true and
accurate in all material respects as of the date when made and
shall be deemed to be made again at and as of the Closing and
shall then be true and accurate in all material respects;
8.1.2 ASI and the Sellers shall have performed and
complied in all material respects with each and every covenant,
agreement and condition required by this Agreement to be
performed or complied with by them prior to or at the Closing;
8.1.3 The Sellers and ASI shall each deliver to
Rochester at the Closing a certificate, certifying to the
fulfillment of the conditions set forth in this Section 8.1.
8.2 Proceedings. No order of any court or other
governmental agency shall have been issued which enjoins the
consummation of the transactions contemplated by this Agreement.
8.3 No Casualty. Prior to the Closing, there shall not
have occurred any damage, destruction or loss not covered by
insurance exceeding $50,000, or losses due to toll fraud
exceeding six times the average monthly toll fraud losses for the
six months preceding the month in which this Agreement is
executed, adversely affecting the services, products, properties,
business operations or prospects of ASI.
8.4 Proceedings and Instruments Satisfactory. All
proceedings, corporate or otherwise, to be taken in connection
with the transactions contemplated by this Agreement and all
documents incident thereto shall be satisfactory in form and
substance to Rochester and ASI shall have furnished Rochester
with certified copies of such proceedings and such other
instruments and documents as Rochester shall have reasonably
requested.
8.5 Delivery of ASI Common Stock. The Sellers shall
have delivered certificates representing all of the ASI Stock,
free and clear of all liens and encumbrances, duly endorsed in
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<PAGE> 31
blank with guaranteed signatures and all required transfer
stamps, if any.
8.6 Consents of ASI's Creditors and Others. If required
by Rochester in writing, each instrument or other agreement or
document under which ASI has incurred or may incur debt or bank
borrowings or other performance obligations shall have been
amended where necessary or appropriate, without the assumption by
Rochester or ASI of any additional obligation or cost and in a
manner satisfactory in form and substance to Rochester and ASI,
so as to permit the transactions contemplated by this Agreement
without a default or acceleration of any obligation thereunder
and to provide that neither Rochester nor ASI shall become
liable, contingently or otherwise, by reason of consummation of
such transactions, for acceleration of payment or other
performance of such debt, bank borrowings or obligations.
8.7 No Change in ASI's Capitalization. ASI's authorized
and issued and outstanding capital stock shall be as stated in
Section 3.2 and ASI shall have no agreement, obligation or
commitment of any character to issue shares of its capital stock,
or debentures, bonds, or other evidences of indebtedness
convertible, in whole or in part, into shares of its capital
stock.
8.8 Resolutions and Resignation of ASI's Directors. ASI
shall have delivered to Rochester at the Closing certified copies
of resolutions adopted by the Board of Directors of ASI adopting
and approving this Agreement.
8.9 Certificates of Good Standing. ASI shall have
delivered to Rochester a Certificate of Good Standing (or its
equivalent) issued by the Secretary of State of the State of
Minnesota to the effect that ASI is duly incorporated and in good
standing under the laws of the States, as of the date of the
Closing.
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8.10 Certified Articles. ASI shall have furnished to
Rochester a copy of its Articles of Incorporation, including all
amendments thereto, which shall have been certified by the
Secretary of State of the States as of a date reasonably near the
Closing Date.
8.11 Certified Bylaws. ASI shall have furnished to
Rochester a copy of the Bylaws of ASI which shall have been
certified by the Secretary of ASI as of the Closing Date.
8.12 Certificate of Incumbency. ASI shall have furnished
to Rochester a Certificate of the Secretary of ASI, certified as
of the Closing Date, as to the incumbency and signatures of the
officers of ASI executing this Agreement and any document
contemplated or delivered under this Agreement.
8.13 Corporate Actions. On or before the Closing (i) the
Board of Directors or the Executive Committee thereof of
Rochester shall have approved and ratified this Agreement and
authorized the transactions contemplated hereby and (ii) ASI
shall have taken, and the Sellers shall cause ASI to have taken
all corporate action as may be necessary and satisfactory to
Rochester, in its sole discretion, to formalize, update, bolster
and ratify the past actions of the employees, officers, directors
and shareholders of ASI.
8.14 Employment and Non-Compete Agreements. On or before
the Closing, the Sellers shall have entered into employment and
non-compete agreements (the "Employment and Non-Compete
Agreements") in substantially the form attached hereto and made a
part hereof as Schedule 8.14 with Rochester and ASI. Further,
ASI shall have obtained from James A. Smith, Jr. ("Smith"), his
written agreement, in a form reasonably satisfactory to Rochester
and as to which Rochester has received an opinion of counsel of
Rochester's choice that such agreement is enforceable in the
State of California and such other states as may be applicable,
pursuant to which: (i) Smith agrees to remain employed by ASI in
substantially his current capacity for a period of not less than
one year following the Closing; (ii) ASI is permitted to
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<PAGE> 33
terminate Smith's employment for cause without the payment of any
form of consideration; (iii) Smith covenants to refrain from
competing with ASI during the term of his employment and for a
period of not less than two years thereafter; and (iv) ASI,
Rochester and its affiliates are provided with adequate remedies
in the event of Smith's breach of his employment agreement and
covenant not to compete.
8.15 Financial Statements. Prior to the Closing, ASI
shall have delivered to Rochester its audited balance sheet and
the related statements of income and retained earnings and
statements of cash flows for the fiscal year ending October 31,
1994, which audited financial statements will reflect results
consistent with those reflected on the interim unaudited
financial statements provided by ASI to Rochester prior to the
date of this Agreement.
8.16 Billing System License. On or before the Closing,
ASI shall have been granted by the owner of the billing software
used in ASI's California operations, in a form reasonably
satisfactory to Rochester, a written, perpetual license for the
use of such software.
8.17 Escrow Agreement. At the Closing, each of the
Sellers shall have executed and delivered to Rochester an
agreement substantially in the form attached hereto and made a
part hereof as Schedule 8.17 (the "Escrow Agreement") pursuant to
which there shall be deposited in escrow by each Seller with an
escrow agent of Rochester's choice 215,000 shares (the "Escrow
Fund"), multiplied by the applicable Percentage Interest to
secure the indemnification obligations of the Sellers under
Article XI of this Agreement and of each Seller with Section 5 of
his Employment and Non-Compete Agreement. Each Seller
understands and agrees that the Escrow Fund shall secure the
indemnification obligation of the other Seller under such
Seller's Employment and Non-Compete Agreement. At any time
during the term of the Escrow Agreement, and in accordance with
the procedures set forth therein, the Sellers shall be permitted
to withdraw, in a single transaction, all of the shares of the
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<PAGE> 34
Rochester Stock from the Escrow Fund to the extent that, in lieu
thereof, the Sellers shall have deposited the sum of $5,000,000
in cash, plus interest thereon at the then prevailing prime rate
charged by Chase Manhattan Bank, N.A., from the date of the
establishment of the Escrow Fund to the date of the withdrawal
therefrom of the Rochester Stock.
8.18 Pooling Opinion. Before the Closing, Rochester
shall have received an opinion from Price Waterhouse, its
independent auditor, to the effect that the transactions
contemplated by this Agreement qualify for treatment under all
relevant accounting principles, opinions and rulings as pooling
of interests combination.
ARTICLE IX. MUTUAL COVENANTS AND CONDITIONS TO OBLIGATIONS OF ASI
AND ROCHESTER
9.1 Applications to the Commissions. As soon as
practicable after execution of this Agreement, ASI and Rochester
shall join in applications to the Commissions, including the New
York State Public Service Commission, if required (the "NYPSC"),
requesting the approvals and authorizations of each such
Commission and the NYPSC of the transactions contemplated by this
Agreement. Rochester and the Sellers shall bear equally all fees
of the Commissions and the NYPSC charged in connection with or
incidental to the filing and processing of the aforesaid
applications, as well as the cost of filing and processing. All
other fees of legal counsel and accountants and other
"out-of-pocket" expenses shall be borne by the party incurring
them.
9.2 Necessity for Commission Approvals. The obligations
of ASI, Rochester and the Sellers under this Agreement are
subject to the receipt prior to the Closing of Final Orders (as
defined below) of the Commissions and the NYPSC approving and
authorizing the transactions contemplated herein. Rochester, the
Sellers and ASI shall not be obligated to consummate such
transactions if, in the judgment of Rochester's Board of
Directors or its Executive Committee of the Board of Directors,
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<PAGE> 35
there is contained in any such order a term, condition or
provision which is unduly burdensome. For the purposes of this
Section 9.2, a "Final Order" shall mean an order of any
Commission or the NYPSC which is not subject to rehearing by such
Commission or the NYPSC or to judicial review. The provisions of
the prior sentence notwithstanding, nothing in this Section 9.2
shall be construed to require a party to seek judicial review of
a Commission or NYPSC order if, upon reconsideration by the
Commission which issued such an order or the NYPSC upon the
motion of a party to this Agreement or a third party, a party to
this Agreement determines that such an order upon reconsideration
contains a term, condition or provision which is unduly
burdensome.
Each of the parties to this Agreement agrees that if
Rochester, using its reasonable judgment, determines that an
application to any other state or federal agency for its approval
and authorization of the transactions contemplated herein is
required, then Rochester shall file such application at its sole
expense and the Sellers and ASI shall join in such application
with Rochester and otherwise act in accordance with the
provisions of Section 9.1 of this Agreement with respect to such
application.
9.3 Other Filings. Within 20 days after the execution
of this Agreement, ASI and Rochester, if necessary, shall apply,
file or give notice to the Federal Trade Commission and the
Department of Justice, Antitrust Division, of the transactions
contemplated herein. Prior to the Closing Date, any applicable
waiting period under the HSR Act shall have expired or been
terminated. Rochester, the Sellers and ASI shall not be
obligated to consummate such transactions if, in the judgment of
Rochester's Board of Directors or its Executive Committee of the
Board of Directors, there is contained in any order issued by the
Federal Trade Commission and/or the Department of Justice,
Antitrust Division, a term, condition or provision which is
unduly burdensome. The filings and related expenses of all such
filings shall be made and borne by the party making or incurring
them.
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<PAGE> 36
ARTICLE X. GENERAL INDEMNITY AGREEMENTS
10.1 Sellers' Litigation Indemnity Agreements. Except as
provided in Article XI below, the Sellers, jointly and severally,
shall for a period of six years from the Closing Date indemnify
ASI, Rochester and its affiliates and hold ASI, Rochester and its
affiliates harmless from any and all claims, actions, suits,
liabilities, losses, damages and expenses of every nature and
character (including, but not by way of limitation, all
reasonable attorneys' fees and all amounts paid in settlement of
any claim, action or suit) ("Losses") which arise or result
directly or indirectly from matters set forth on Schedule 3.9
hereof, or which should have been listed on such Schedule,
provided, however, that the indemnification obligation contained
in this Section 10.1 shall not apply to any Losses which arise or
result directly or indirectly from any such matters unless an
Article X Notice of Claim (as defined below) has been delivered
to the Sellers prior to the sixth anniversary of the Closing
Date. If an Article X Notice of Claim has been delivered prior
to such anniversary date, any and all such Losses, whether
incurred prior to or after such anniversary date, shall be
subject to indemnification under this Section 10.1.
10.2 Sellers' Other Indemnity Agreements. Except as
provided in Article XI below, all representations and warranties
made in this Agreement by the Sellers are made to and for the
benefit of both Rochester and ASI. With respect to all such
representations or warranties in this Agreement (and/or in the
Exhibits or Schedules attached hereto and the documents to be
delivered by the Sellers at the Closing), the Sellers, jointly
and severally, shall for a period of five years from the Closing
Date indemnify Rochester and ASI against and hold Rochester and
ASI harmless from any and all Losses which arise or result
directly or indirectly from any breach of any such representation
or warranty, provided, however, that the indemnification
obligation contained in this Section 10.2 shall not apply to any
Losses which arise or result directly or indirectly from any such
matters unless an Article X Notice of Claim (as defined below)
has been delivered to the Sellers prior to the fifth anniversary
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<PAGE> 37
of the Closing Date. If an Article X Notice of Claim has been
delivered prior to such anniversary date, any and all such
Losses, whether incurred prior to or after such anniversary date,
shall be subject to indemnification under this Section 10.2.
10.3 Rochester's Indemnity Agreements. Except as
provided in Article XI below, with respect to all representations
and warranties made by Rochester in this Agreement (and/or in the
Exhibits and Schedules attached hereto and the documents to be
delivered by Rochester at the Closing), Rochester shall for a
period of five years from the Closing Date indemnify the Sellers
against and hold the Sellers harmless from any and all Losses
which arise or result directly or indirectly from any breach of
any such representation or warranty, provided, however, that the
indemnification obligation contained in this Section 10.3 shall
not apply to any Losses which arise or result directly or
indirectly from any such matters unless an Article X Notice of
Claim (as defined below) has been delivered to Rochester prior to
the fifth anniversary of the Closing Date. If an Article X
Notice of Claim has been delivered prior to such anniversary
date, any and all such Losses, whether incurred prior to or after
such anniversary date, shall be subject to indemnification under
this Section 10.3.
10.4 Limitation of Amount. No party indemnified under
Sections 10.1, 10.2 and 10.3 above shall make a claim for
indemnification unless and until such party has incurred a Loss
based on a single item or series of related items for which such
party is entitled to indemnification in excess of $25,000 or
cumulative Losses for which such party is entitled to
indemnification in excess of the sum of $100,000, except to the
extent that such Losses have been incurred by virtue of or
resulted from fraud or intentional misrepresentations.
10.5 No Limitation. The indemnity agreements in this
Article X shall not constitute a limitation on any of the
warranties, representations, covenants or agreements herein.
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<PAGE> 38
10.6 Procedure for General Claims. Rochester shall give
reasonably prompt written notice to Simon, acting on behalf of
the Sellers (in such capacity, the "Sellers' Representative") of
any claim or event other than Article X Third Party Claims (as
defined below) with respect to which Rochester believes it or its
affiliates is or may be entitled to indemnification pursuant to
this Article X and the Sellers' Representative shall give
reasonably prompt notice to Rochester of any claim or event other
than Article X Third Party Claims with respect to which the
Sellers believe they are or may be entitled to indemnification
pursuant to this Article X (in each case, an "Article X Notice of
Claim"), provided, however, that the failure to give notice as
provided in this Section 10.6 shall not relieve the other party
of its indemnification obligations hereunder, except to the
extent that the indemnifying party is prejudiced by such failure
to give notice. The Article X Notice of Claim shall state the
nature and basis of said claim or event, the amount thereof to
the extent known and the basis of such party's belief that it (or
its affiliates, in the case of Rochester) may be entitled to
indemnification with respect thereto, including, without
limitation, identifying the representation, warranty, covenant or
agreement which such party believes has been breached.
10.7 Procedure for Article X Third Party Claims. (a)
Rochester, on the one hand, and the Sellers' Representative, on
the other, (the "Indemnified Party"), shall give reasonably
prompt written notice to the other (the "Indemnifying Party") of
any claim or event with respect to which the Indemnified Party
believes it or its affiliates, in the case of a notice by
Rochester, or either Seller, in the case of a notice by the
Sellers' Representative, is or may be entitled to indemnification
pursuant to this Article X resulting from any claim, action, suit
or proceeding brought by any third party (other than pursuant to
the Dissenters' Suits (as defined below)) in connection with any
litigation, administrative proceedings or similar actions
(including, without limitation, claims by any assignee or
successor of a party hereto or any governmental agency)
(collectively, "Article X Third Party Claims"), together with an
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<PAGE> 39
estimate of the amount in dispute thereunder and a copy of any
claim, process, legal pleadings or correspondence with respect
thereto received by the Indemnified Party, provided, however,
that the failure of the Indemnified Party to give such notice
shall not relieve the Indemnifying Party of its obligations
hereunder, except to the extent that the Indemnifying Party is
prejudiced by such failure to give notice. Within ten days of
receipt of such notice, the Indemnifying Party may, by written
notice to the Indemnified Party, assume the defense of such
Article X Third Party Claim through counsel of its own choosing
(which counsel shall be reasonably acceptable to the Indemnified
Party) with all fees and expenses thereof to be paid by the
Indemnifying Party, in which event the Indemnified Party may
participate in the defense thereof at its sole expense, provided
that such Indemnified Party shall have the right to employ
separate counsel to represent such Indemnified Party if, in such
Indemnified Party's reasonable judgment, a conflict of interest
between the Indemnifying Party and such Indemnified Party exists
with respect to such Article X Third Party Claim, with all fees
and expenses of such separate counsel to be paid by the
Indemnifying Party. If the Indemnifying Party fails to assume
the defense of such Article X Third Party Claim by failing to
deliver a written notice of the Indemnifying Party's intention to
assume such defense within ten days after receipt of the initial
notice thereof, or thereafter abandons or fails to diligently
pursue such defense (and only in such circumstances), the
Indemnified Party may assume such defense and the fees and
expenses of its counsel will be paid by the Indemnifying Party.
If the Indemnifying Party exercises its right to undertake the
defense against any such Article X Third Party Claim as provided
above, the Indemnified Party shall cooperate with the
Indemnifying Party in such defense and make available to the
Indemnifying Party all pertinent records, materials, and
information in its possession or under its control relating
thereto as is reasonably required by the Indemnifying Party, with
all expenses incurred in connection therewith to be paid by the
Indemnifying Party. Similarly, if the Indemnified Party is,
directly or indirectly, conducting the defense against any such
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<PAGE> 40
Article X Third Party Claim, the Indemnifying Party shall
cooperate with the Indemnified Party in such defense and make
available to the Indemnified Party all such records, materials
and information in the Indemnifying Party's control relating
thereto as is reasonably required by the Indemnified Party, with
all expenses incurred in connection therewith to be paid by the
Indemnifying Party. Notwithstanding anything in this Section
10.7 to the contrary, however, if a claim shall be made with
respect to which the Indemnifying Party has agreed to assume the
defense thereof, the Indemnifying Party shall not thereafter be
entitled to dispute, and hereby agrees not to dispute, the
Indemnified Party's right to indemnification therefor pursuant to
Article X hereof or any subsequent claims of the Indemnified
Party with respect to such Article X Third Party Claim.
(b) The Indemnifying Party shall not, without the written
consent of the Indemnified Party, (i) settle or compromise any
Article X Third Party Claim or consent to the entry of any
judgment which does not include as an unconditional term thereof
the delivery by the claimant or plaintiff to the Indemnified
Party of a written release from all liability in respect of such
Article X Third Party Claim, (ii) settle or compromise any
Article X Third Party Claim in any manner that may adversely
affect the Indemnified Party or (iii) upon the issuance of an
order of a court of competent jurisdiction or an arbitrator with
respect to such Article X Third Party Claim, appeal or otherwise
challenge such order. Upon the settlement or compromise of any
Article X Third Party Claim, the order of a court of competent
jurisdiction or arbitrator (if the Indemnified Party has failed
to consent to the appeal or challenge thereof) with respect
thereto or the final, non-appealable order of any appellate court
(if the Indemnified Party has consented to the appeal or
challenge thereof) with respect thereto, as the case may be, any
resulting settlement, award, damages or judgment shall be paid
(i) in the case of any such Article X Third Party Claim with
respect to which the Sellers are the Indemnifying Party, by the
Sellers, and (ii) in the case of any such Article X Third Party
Claim with respect to which Rochester is the Indemnifying Party,
by Rochester.
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THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.
ARTICLE XI. XXXXXX INDEMNIFICATION
11.1 XXXXXXX Defined. This Article XI shall set forth
the Sellers' indemnification obligations to ASI, Rochester and
its affiliates with respect to the following matters:
XXXXXXXXXXXXXXXXXXXXXXXXXXXXX
11.2 Indemnification From Escrow Fund. From the Closing
Date and through the Final Resolution (as defined below) of the
XXXXXX, the Sellers, jointly and severally, shall indemnify ASI,
Rochester and its affiliates (together, the "Article XI
Indemnified Parties") and hold the Article XI Indemnified Parties
harmless from any and all liability, loss, damage and expense of
every nature and character, whether incurred prior to or
subsequent to the date of this Agreement, including but not
limited to, all reasonable attorneys' and experts' fees incurred
in connection with, all XXXXXXX (all of such liability, loss,
damage, expense, award, judgment or settlement being known herein
as "Article XI Losses" or, individually, an "Article XI Loss").
For the purposes of this Article XI, the term "Final Resolution"
shall mean XXXXXX
XXXXXX. Notwithstanding the foregoing, the Article XI
Indemnified Parties shall be entitled to indemnification under
this Article XI with respect to any Article XI Loss or Losses
incurred by such Article XI Indemnified Parties XXXXXXX.
11.3 Procedure for Claims. Rochester shall give
reasonably prompt written notice to the Sellers' Representative
and the Escrow Agent of any Article XI Loss with respect to which
Rochester believes the Article XI Indemnified Parties are or may
be entitled to indemnification pursuant to this Article XI (an
"Article XI Notice of Claim"); provided, however, that the
failure of Rochester to give notice as provided in this Section
11.3 shall not relieve the Sellers of their obligation hereunder
to indemnify and hold harmless the Article XI Indemnified Parties
in accordance with the terms hereof. The Article XI Notice of
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<PAGE> 42
Claim shall state the nature and basis of such Article XI Loss,
the amount thereof to the extent known and the basis of
Rochester's belief that the Article XI Indemnified Parties are or
may be entitled to indemnification with respect thereto. Each
Article XI Notice of Claim shall be delivered in accordance with
the terms and conditions of the Escrow Agreement.
If within 20 days from the date of receipt of an Article XI
Notice of Claim by the Escrow Agent and the Sellers'
Representative, the Sellers' Representative shall not have given
notice to Rochester and the Escrow Agent that there is or may be
a dispute relating in any way to such Article XI Notice of Claim
or the matters set forth therein, or both, then the Escrow Agent,
pursuant to the terms of the Escrow Agreement, shall pay or
disburse the amount set forth in the Article XI Notice of Claim,
out of the then remaining balance of the Escrow Fund, to
Rochester or to the Article XI Indemnified Party identified in
the Article XI Notice of Claim to receive such payment promptly
after the expiration of such 20 day period and shall give notice
of such payment or disbursement to the Sellers' Representative.
If within 20 days from the date of receipt of an Article XI
Notice of Claim by the Escrow Agent and the Sellers'
Representative, the Sellers' Representative shall have given
notice to Rochester and the Escrow Agent that there is or may be
a dispute relating in any way to such Article XI Notice of Claim
or the matters set forth therein, or both (an "Article XI Notice
of Disputed Claim"), then payment shall be made by the Escrow
Agent out of the then remaining balance of the Escrow Fund only
to the extent of the undisputed amount, pending the resolution of
such dispute in accordance with the provisions of this Section
11.3. The amount in dispute as set forth in the Article XI
Notice of Disputed Claim shall, after such Article XI Notice of
Disputed Claim has been given, remain in and part of the Escrow
Fund until the termination of the Escrow Agreement or, if
earlier, until such time as the Escrow Agent receives either (x)
a joint statement from the Sellers' Representative and Rochester
setting forth the resolution of such dispute and, if applicable,
authorizing the payment or disbursement by the Escrow Agent to
Rochester of such amount or any portion thereof that the parties
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<PAGE> 43
shall have mutually agreed upon, or (y) a copy of an order or
determination from an arbitrator or a court of competent
jurisdiction setting forth the resolution of such dispute and, if
applicable, directing the payment or disbursement by the Escrow
Agent to Rochester of such amount or any portion thereof. Upon
receipt of such joint statement or order or determination, the
Escrow Agent shall promptly pay, out of the then remaining
balance of the Escrow Fund, the amount authorized or directed to
be paid or disbursed as payment or disbursement to the Sellers or
to Rochester, as applicable. If the balance of the Escrow Fund
is insufficient to satisfy any obligation of the Sellers under
this Article XI, then the Sellers shall nonetheless remain liable
to the Article XI Indemnified Parties with regard to Article XI
Losses in accordance with the provisions of this Article XI other
than the provisions with respect to the Escrow Fund.
11.4 Defense. The Sellers may XXXXXXXX provided that (i)
the Sellers shall keep Rochester advised of all developments
therein and cooperate with Rochester in connection with such
defense and shall, at the Sellers' expense, make available to
Rochester all such records, materials and information in the
Sellers' possession or under the Sellers' control relating
thereto as is reasonably requested by Rochester, (ii) XXXXXXX and
(iii) Rochester or ASI shall have the right to assume the defense
of any XXXXXXXX with counsel of its own choosing if the Sellers
have abandoned or have failed to diligently pursue such defense.
All expenses of such defense shall be paid by the Sellers (and
shall be withdrawn from the Escrow Fund to the extent funds in
cash remain therein) and any such expenses incurred by the
Article XI Indemnified Parties shall be paid by such parties (and
not from the Escrow Fund) unless the Sellers have abandoned or
have failed to diligently pursue such defense.
11.5 Settlement or Decision. The Sellers shall not,
without the written consent of the Article XI Indemnified
Parties, (i) settle or compromise any of the XXXXXXX or consent
to the entry of any judgment which does not include as an
unconditional term thereof the delivery by the claimant or
plaintiff to the Article XI Indemnified Parties of a written
release from all liability in respect of such XXXXXXX, (ii)
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<PAGE> 44
affect the Article XI Indemnified Parties or (iii) upon the
issuance of an order of a court of competent jurisdiction or an
arbitrator with respect to such XXXXXXX appeal or otherwise
challenge such order.
ARTICLE XII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
12.1 Survival. The several representations and
warranties of the parties contained in or made pursuant to this
Agreement shall be deemed to have been made on and as of the
Closing and shall remain operative and in full force and effect
until the fifth anniversary of the Closing Date, regardless of
any investigation or statement as to the results thereof, made by
or on behalf of any such party. Except for the provisions of
Articles X and XI, and Sections 5.10, 6.2, 13.5, 13.6, 13.8
through 13.11, inclusive, and 13.13 through 13.16, inclusive, of
this Agreement, the several covenants and agreements of the
parties contained in this Agreement shall expire on the Closing
Date and, except for the provisions of Sections 5.10, 6.2, 13.2,
13.3, 13.5, 13.6, 13.8 through 13.11, inclusive, and 13.13
through 13.16, inclusive, of this Agreement, the several
covenants and agreements of the parties contained in this
Agreement shall expire on the termination or abandonment of this
Agreement.
ARTICLE XIII. MISCELLANEOUS
13.1 Abandonment of Transaction. The transaction may be
abandoned, and this Agreement terminated, at any time after the
date of this Agreement, but not later than the Closing, by:
13.1.1 The mutual consent of the Board of Directors
of ASI and Rochester; or
13.1.2 Rochester, if Rochester discovers facts or
circumstances in the course of Due Diligence, whether or not
Rochester was informed of the matter to which such discovered
facts and circumstances relate prior to the execution of this
Agreement, which are such that in the good faith judgment of
Rochester would make it inadvisable to proceed with the
transactions contemplated by this Agreement; or
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<PAGE> 45
13.1.3 Rochester, if ASI is in willful breach of any
of its representations, warranties, covenants or agreements under
this Agreement in any material respect; or
13.1.4 ASI, if Rochester is in willful breach of any
of its representations, warranties, covenants or agreements
under this Agreement in any material respect; or
13.1.5 Either party hereto if the consummations of
the transactions contemplated by this Agreement have been
enjoined and such injunction is not subject to appeal or if a
Final Order which contains an unduly burdensome term, condition
or provision is issued and no appeal is taken therefrom; or
13.1.6 The Board of Directors of ASI or by Rochester
if the transaction contemplated herein shall not have become
effective on or before April 30, 1995.
13.2 Effect of Termination or Abandonment. If for any
reason the transactions contemplated hereby shall not become
effective, all written schedules and other information and all
copies of material from the books and records of any party
heretofore furnished to any other party shall be returned
promptly to the party furnishing the same and, in such event, the
provisions of this Agreement relating to confidential information
shall survive the termination of this Agreement and the
abandonment of the reorganization.
13.3 Liabilities. In the event this Agreement is
terminated and the contemplated transactions are abandoned
pursuant to Section 13.1 hereof, no party hereto shall have any
duty or liability to the other either for costs, expenses, loss
of anticipated profits or otherwise, except with respect to any
liability or damages incurred or suffered by a party as a result
of the breach by the other party of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
13.4 Assignment. This Agreement shall not be assigned by
ASI or the Sellers.
13.5 Further Assurances. From time to time prior to, at
and after the Closing, the Sellers, ASI and Rochester will and
will cause their respective directors and officers to execute all
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<PAGE> 46
such instruments and take all such actions as the Sellers,
Rochester or ASI, being advised by counsel, shall reasonably
request in connection with the carrying out and effectuating of
the intent and purpose hereof and all transactions and things
contemplated by this Agreement including, without limitation, the
execution and delivery of any and all confirmatory and other
instruments in addition to those to be delivered on the Closing,
and any and all actions which may reasonably be necessary or
desirable to complete the transactions contemplated hereby.
13.6 Notices. All notices, demands and other
communications which may or are required to be given hereunder or
with respect hereto shall be given by ASI on behalf of itself and
the Sellers, and by Rochester on behalf of itself. All such
notices, demands and other communication shall be in writing,
shall be given either by personal delivery or by nationally
recognized overnight courier or by telecopier, and shall be
deemed to have been given or made when personally delivered, one
business day after delivered to a nationally recognized overnight
courier, postage prepaid and receipt requested, or one business
day after transmission by telecopier, receipt confirmed,
addressed as follows:
(i) If to Rochester:
Mr. James G. Dole
Business Development Director
Rochester Telephone Corporation
180 South Clinton Avenue
Rochester, New York 14646-0700
Telecopier: 716-325-6113
with a copy to:
Helen A. Zamboni, Esq.
Rochester Telephone Corporation
180 South Clinton Avenue
Rochester, New York 14646-0995
Telecopier: 716-546-7823
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<PAGE> 47
or to such other address as Rochester may from time to time
designate by notice to ASI and the Sellers;
(ii) If to ASI or the Sellers:
Mr. Steven C. Simon
American Sharecom, Inc.
1300 Nicollet Avenue, Suite 218
Minneapolis, Minnesota 55403
Telecopier: 612-343-3293
with a copy to:
Albert A. Woodward, Esq.
Maun & Simon, PLC
2900 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-1113
Telecopier: 612-338-2271
or to such other address as ASI and the Sellers may from time to
time designate by notice to Rochester.
13.7 Entire Agreement. This Agreement constitutes the
entire agreement between the parties and supersedes and cancels
any and all prior agreements between the parties relating to the
subject matter hereof.
13.8 Rules of Construction. This Agreement shall be
construed as follows:
(a) except as otherwise defined in this Agreement,
words shall be given their commonly understood meaning in
agreements of this nature, except that accounting terms shall be
given the meaning ascribed thereto by generally accepted
accounting principles and interpretations;
(b) this Agreement has been negotiated on behalf of
the parties hereto with the advice of counsel and no general rule
of contract construction requiring an agreement to be more
<PAGE>
<PAGE> 48
stringently construed against the drafter or proponent of any
particular provision shall be applied in construction of this
Agreement;
(c) the captions of Articles and Sections hereof are
for convenience only and shall not control or affect the meaning
or construction of any of the provisions of this Agreement.
13.9 Law Governing. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the
State of New York, but not including the choice of law rules
thereof.
13.10 Waiver of Provisions. The terms, covenants,
representations, warranties or conditions of this Agreement may
be waived only by a written instrument executed by the party
waiving compliance. Such waiver shall be authorized solely by
the individual or his personal representative, if the Sellers, or
the majority vote of the Board of Directors or the Executive
Committee of the corporate party waiving compliance or by
officers authorized by such Board or Committee. The failure of
any party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later
time to enforce the same. No waiver by any party of any
condition, or the breach of any provision, term covenant,
representation or warranty contained in this Agreement, whether
by conduct or otherwise, in any one or more instances shall be
deemed to be or construed as a further or continuing waiver of
any such condition or of the breach of any other provision, term,
covenant, representation or warranty of this Agreement. The
representations and warranties of the Sellers and ASI, on the one
hand, and Rochester, on the other hand, contained in this
Agreement or in any certificate or other document delivered
pursuant hereto or in connection herewith prior to or at the
Closing shall not be deemed waived or otherwise amended or
modified by any investigation made by any party hereto.
13.11 Successors. All of the terms and conditions of this
Agreement shall be binding upon and inure to the benefit of the
<PAGE>
<PAGE> 49
successors and permitted assigns of Rochester and of ASI and the
successors and personal representatives of the Sellers. For the
purpose of this Agreement, the term "successors" shall include
but not be limited to heirs, legatees, and devisees, and the term
"personal representatives" shall include administrators,
executors, guardians, and conservators.
13.12 Counterparts. This Agreement may be executed in
several counterparts, and all so executed shall constitute one
agreement, binding on all of the parties hereto, notwithstanding
that all parties are not signatory to the original or the same
counterpart.
13.13 Public Statements or Releases. ASI, the Sellers and
Rochester each agree not to make, issue or release any public
announcement, statement or acknowledgment of the existence of, or
reveal the terms, conditions and status of, the transactions
provided for in this Agreement, without first attempting to the
extent reasonably possible (and in all cases with regard to
written matters) to clear such announcement, statement,
acknowledgment or revelation with the other parties hereto. Each
party agrees that it will not unreasonably withhold any such
consent or clearance from another party.
13.14 Severability. In the event that any provision in
this Agreement be held invalid or unenforceable, by a court of
competent jurisdiction, such provision shall be severable from,
and such invalidity or unenforceability shall not be construed to
have any effect on, the remaining provisions of this Agreement,
unless such provision goes to the essence of this Agreement in
which case the entire Agreement may be declared invalid and not
binding upon any of the parties.
13.15 No Third Party Beneficiaries. This Agreement and
the obligations of Rochester hereunder shall operate exclusively
for the benefit of the parties executing this Agreement and their
permitted successors and assigns and not for the benefit of any
other person or entity, including, without limitation, any other
shareholder, creditor, employee or former employee of ASI and no
such person or entity shall have any rights or remedies
hereunder.
<PAGE>
<PAGE> 50
13.16 Dispute Resolution. (a) Any dispute arising out of
or relating to this Agreement or the breach, termination or
validity thereof, which has not been resolved within 60 days of
the giving of a notice by one party to the other of the existence
of such dispute, shall be finally settled by arbitration
conducted expeditiously in accordance with the Center for Public
Resources ("CPR") Rules for Non-Administered Arbitration of
Business Disputes by three independent and impartial arbitrators,
of whom one shall be appointed by Rochester and one shall be
appointed by the Sellers (the arbitrators chosen by Rochester and
the Sellers being known as "Party Arbitrators"). Each of the
Party Arbitrators shall be chosen from lists submitted by each of
Rochester, on the one hand, and the Sellers, on the other, to
each other of telecommunications attorneys, law professors,
retired FCC employees, retired judges, or a person on the CPR
Panels of Distinguished "Neutrals". The third arbitrator shall
be chosen by the Party Arbitrators from the CPR Panels of
Distinguished "Neutrals" and shall chair the arbitration. The
arbitration shall be governed by the United States Arbitration
Act, 9 U.S.C. Section 1-16, and judgment upon the award rendered
by the arbitrators may be entered by any court having
jurisdiction thereof. The arbitrators are not empowered to award
damages in excess of compensatory damages and Rochester and the
Sellers hereby irrevocably waive any damage in excess of
compensatory damages.
(b) The place of the arbitration shall be Chicago,
Illinois, and the arbitration shall be conducted under the
auspices of any for-profit alternative dispute resolution service
recommended by the Bar Association of Cook County, Illinois.
(c) The procedures specified in this Section 13.16 shall be
the sole and exclusive procedures for the resolution of disputes
arising out of or relating to this Agreement, or the breach,
termination or validity thereof, provided that either Rochester,
on the one hand, or the Sellers, on the other, may seek a
preliminary injunction or other provisional judicial relief if in
its or their judgment such action is necessary to avoid
irreparable damage or to preserve the status quo. Despite such
action, the parties will continue to participate in good faith in
the procedures specified in this Section 13.16.
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<PAGE> 51
(d) All applicable statutes of limitation and defenses
based upon the passage of time shall be tolled while the
procedures specified in this Section 13.16 are pending.
Rochester and the Sellers shall take such action, if any,
required to effectuate such tolling.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be executed and their corporate seals, if applicable, to be
hereunto affixed, effective as of the day and year first above
written.
/s/Steven C. Simon
-----------------------
Steven C. Simon
/s/James J. Weinert
------------------------
James J. Weinert
ROCHESTER TELEPHONE CORPORATION
By: /s/John K. Purcell
--------------------------
John K. Purcell
Corporate Vice President
AMERICAN SHARECOM, INC.
By: /s/Steven C. Simon
---------------------------
Steven C. Simon
President
<PAGE> 1
EXHIBIT 2-2
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement, dated as of March 17, 1995
(this "Agreement"), among FRONTIER CORPORATION, a New York
corporation (the "Company") and Steven C. Simon and James J.
Weinert (each a "Shareowner").
W I T N E S S E T H :
WHEREAS, pursuant to an agreement (the "Acquisition
Agreement") dated as of November 29, 1994 among the Company,
American Sharecom, Inc., a Minnesota corporation ("ASI"), Steven
C. Simon and James J. Weinert, all shares of common stock, par
value $.01 per share, of ASI shall, at the Closing Date (as
defined in the Acquisition Agreement), be transferred to the
Company (the "Transaction") in exchange for an aggregate of
8,710,000 shares (the "Shares") of common stock, par value $1.00
per share, of the Company ("Common Stock"); and
WHEREAS, it is a condition to the obligations of the Company
and the Shareowners to consummate the Transaction that this
Agreement be executed and delivered by the parties hereto.
NOW, THEREFORE, intending to be legally bound, the parties
hereto agree as follows:
Section 1. Certain Definitions. As used in this Agreement, the
following terms shall have the following meanings:
(a) "Business Day" shall mean any day that is not a
Saturday, a Sunday, a bank holiday or any other day on which
commercial banking institutions in New York, New York are not
generally open for business.
(b) "Holder" shall mean any Shareowner that owns of record
Registrable Securities.
(c) "Person" shall mean an individual, partnership,
corporation, business trust, joint stock company, trust,
unincorporated association, joint venture or other entity of
whatever nature.
<PAGE>
<PAGE> 2
(d) "Registrable Securities" shall mean the Shares and any
shares of Common Stock which may be issued or distributed in
respect thereof by way of stock dividend or stock split or other
distribution, recapitalization or reclassification. As to any
particular Registrable Securities, once issued such securities
shall cease to be Registrable Securities when (i) a registration
statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities
shall have been disposed of in accordance with such registration
statement, (ii) they shall have been distributed to the public
pursuant to Rule 144 (or any successor provision) under the
Securities Act, (iii) they shall have been otherwise transferred
(except transfers to another Shareowner or to a Shareowner's
estate in accordance with Section 7(i)), new certificates for
them not bearing a legend restricting further transfer shall have
been delivered by the Company and subsequent disposition of them
shall not require registration or qualification of them under the
Securities Act or any state securities or blue sky law then in
force, or (iv) they shall have ceased to be outstanding.
(e) "Registration Expenses" shall mean any and all expenses
incident to performance of or compliance with this Agreement,
including, without limitation, (i) all SEC and stock exchange or
National Association of Securities Dealers, Inc. registration and
filing fees, (ii) all fees and expenses of complying with
securities or blue sky laws (including fees and disbursements of
counsel for the underwriters in connection with blue sky
qualifications of the Registrable Securities), (iii) all
printing, messenger and delivery expenses, (iv) all fees and
expenses incurred in connection with the listing of the
Registrable Securities on the New York Stock Exchange, or on any
other securities exchange or on the NASDAQ National Market System
pursuant to clause (vii) of Section 4, or (v) the fees and
disbursements of counsel for the Company and of its independent
public accountants, including the expenses of any special audits
and/or "cold comfort" letters required by or incident to such
performance and compliance and the reasonable fees of any special
experts retained in connection with the requested registration.
<PAGE>
<PAGE> 3
(f) "SEC" shall mean the Securities and Exchange Commission
or its successor.
(g) "Securities Act" shall mean the Securities Act of 1933,
as amended, or any similar federal statute, and the rules and
regulations of the SEC thereunder, all as the same shall be in
effect from time to time, and a reference to a particular section
thereof shall be deemed to include a reference to the comparable
section, if any, of any similar federal statute.
Section 2. Incidental Registrations.
(a) Right to Include Registrable Securities. If, at any
time commencing on the second anniversary of the Closing Date,
the Company proposes to register Common Stock under the
Securities Act in connection with the public offering of Common
Stock for its own account solely for cash (other than a
registration on Form S-4 or S-8, or any successor or other forms
promulgated for similar purposes), in a manner which would permit
registration of Registrable Securities for sale to the public
under the Securities Act, it will, at each such time, give prompt
written notice to each Holder of its intention to do so and of
the Holder's rights under this Section 2, provided that if any
Holder shall beneficially own less than 3% of the outstanding
Common Stock (calculated in accordance with the provisions of
Rule 13d-3 (or any successor provision) under the Securities
Exchange Act of 1934, as amended ("Rule 13d-3")), such Holder
shall have the right to receive the foregoing notice from the
Company and to have his Registrable Securities registered in
accordance with the provisions of this Section 2 prior to the
second anniversary of the Closing Date; provided, however, that
no such notice shall be required to be given by the Company and
no Holder shall have any rights under this Section 2 unless, at
the time the Company proposes to register such Common Stock, all
Holders beneficially own, in the aggregate, less than 5% of the
Common Stock then outstanding (calculated in accordance with the
provisions of Rule 13d-3). Upon the written request of any
Holder received by the Company within 15 days after the delivery
of any such notice by the Company (which request shall specify
the Registrable Securities intended to be disposed of by such
<PAGE>
<PAGE> 4
Holder), the Company will use its best efforts to effect the
registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by
the Holders, subject to Section 2(c) and Section 7, to the extent
required to permit the disposition of the Registrable Securities
so to be registered; provided, that (i) if, at any time after
giving written notice of its intention to register any securities
and prior to the effective date of the registration statement
filed in connection with such registration, the Company shall
determine for any reason not to proceed with the proposed
registration of the securities to be sold by it, the Company may,
at its election, give written notice of such determination to the
Holders and, thereupon, shall be relieved of its obligation to
register any Registrable Securities in connection with such
registration, and (ii) if such registration involves an
underwritten offering, each Holder requesting to be included in
the Company's registration must sell its Registrable Securities
to the underwriters selected by the Company on the same terms and
conditions as apply to the Company or other selling holders, with
such differences, including any with respect to indemnification
and liability insurance, as may be customary or appropriate for
such underwriters in combined primary and secondary offerings.
(b) Expenses. In connection with any registration pursuant
to this Section 2, each Holder will pay (i) a pro rata portion of
the aggregate Registration Expenses (based on the number of such
Holder's Registrable Securities included in a registration
statement at the time the registration statement is filed with
the SEC relative to the total number of securities covered by
such registration statement at such time), (ii) a pro rata
portion (based on the number of such Holder's Registrable
Securities included in a registration statement at the time the
registration statement is filed with the SEC relative to the
total number of securities covered by such registration statement
at such time) of the aggregate fees and disbursements of
underwriters customarily paid by the issuers or sellers of
securities, including liability insurance if the Company so
desires or if the underwriters so require, and the reasonable
fees and expenses of any special experts retained in connection
with the requested registration, (iii) the fees and disbursements
<PAGE>
<PAGE> 5
of counsel to such Holder and (iv) all underwriting discounts and
commissions and transfer taxes, if any, applicable to shares of
Registrable Securities to be sold on behalf of such Holder.
(c) Priority in Incidental Registrations. If a
registration pursuant to this Section 2 involves an underwritten
offering and the managing underwriter advises the Company in
writing that, in its opinion, the number of securities requested
to be included in such registration exceeds the number which can
be sold in such offering, so as to be likely to have an adverse
effect on such offering as contemplated by the Company (including
the price at which the Company or other holders of Securities
propose to sell such securities), then the Company will include
in such registration (i) first, 100% of the securities the
Company or such other holders propose to sell and (ii) second,
the number of Registrable Securities requested to be included in
such registration by the Holders (in proportion (as nearly as
practicable) to the number of such Registrable Securities each
Holder requested to be registered pursuant to Section 2(a))
which, in the opinion of such managing underwriter, can be sold
without having the adverse effect referred to above.
Section 3. Registration on Request.
(a) Request by a Holder. (I) If, at any time commencing
on the second anniversary of the Closing Date, the Company shall
receive a written request from a Holder that the Company effect
the registration under the Securities Act of all or part of such
Holder's Registrable Securities (constituting in the aggregate at
least 1,500,000 shares (such number of shares to be adjusted to
reflect any stock split, stock dividend, or other combination or
reclassification of the Company's capital stock after the date
hereof)) and specifying the intended method of disposition
thereof, then the Company will, within 10 days after the receipt
thereof, give written notice to all other Holders of the receipt
of such request and each such Holder, in lieu of exercising his
rights under Section 2(a), may elect (by written notice received
by the Company within 10 days from the date the Company provided
the aforementioned notice to such Holder) to have his Registrable
Securities included in such registration pursuant to this Section
<PAGE>
<PAGE> 6
3(a)(I), provided that if any Holder shall beneficially own less
than 3% of the outstanding Common Stock (calculated in accordance
with the provisions of Rule 13d-3), such Holder shall have the
right to request that the Company effect a registration pursuant
to this Section 3(a)(I) prior to the second anniversary of the
Closing Date; provided, however, that no Holder shall have the
right to request that the Company effect a registration pursuant
to this Section 3(a)(I) unless, at the time such request is
received by the Company, (i) such Holder holds at least 25% of
the Registrable Securities then outstanding and (ii) all Holders
beneficially own, in the aggregate, less than 5% of the Common
Stock then outstanding (calculated in accordance with the
provisions of Rule 13d-3). Thereupon the Company will, as soon
as is practicable, use its best efforts to effect the
registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by
the Holders, provided that (i) each Holder shall have the right
to request the Company to register such Registrable Securities
pursuant to this Section 3(a)(I) on only one occasion and (ii)
the Company's obligations under this Section 3(a)(I) shall be
subject to the limitations set forth in Section 7, and provided
further that the Company (i) shall not be obligated to cause any
special audit to be undertaken in connection with any such
registration, (ii) at its sole discretion may offer a right to
participate in such registration statement to other holders of
the Company's securities, and may itself participate in such
registration, (iii) shall be entitled to postpone for a
reasonable period of time, but not in excess of 90 days, the
filing of any registration statement otherwise required to be
prepared pursuant to this Section 3(a)(I) if the Company is, at
such time, conducting or about to conduct an underwritten public
offering of equity securities (or securities convertible into
equity securities) and is advised in writing by its managing
underwriter that such offering would in its opinion be adversely
affected by the registration so requested and (iv) shall be
entitled to postpone such requested registration for up to 120
days if the Company determines, in view of the advisability of
deferring public disclosure of material corporate developments or
other information, that such registration and the disclosure
required to be made pursuant thereto would not be in the best
<PAGE>
<PAGE> 7
interests of the Company at such time.
(II) If, at any time after five months after the Closing
Date, the Company shall receive a written request from a Holder
that the Company effect the registration under the Securities Act
of all or part of such Holder's Registrable Securities
(constituting in the aggregate at least 435,500 and no more than
871,000 shares (such number of shares to be adjusted to reflect
any stock split, stock dividend, or other combination or
reclassification of the Company's capital stock after the date
hereof)) and specifying the intended method of disposition
thereof (which disposition shall be completed within 90 days
after the commencement thereof), then the Company will, within 10
days after the receipt thereof, give written notice to all other
Holders of the receipt of such request. Thereupon the Company
will, as soon as is practicable, use its best efforts to effect
the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register by
the Holders, provided that (i) each Holder shall have the right
to request the Company to register such Registrable Securities
pursuant to this Section 3(a)(II) on only one occasion and (ii)
the Company's obligations under this Section 3(a)(II) shall be
subject to the limitations set forth in Section 7, and provided
further that the Company (i) shall not be obligated to cause any
special audit to be undertaken in connection with any such
registration, (ii) at its sole discretion may offer a right to
participate in such registration statement to other holders of
the Company's securities, and may itself participate in such
registration, (iii) shall be entitled to postpone for a
reasonable period of time, but not in excess of 90 days, the
filing of any registration statement otherwise required to be
prepared pursuant to this Section 3(a)(II) if the Company is, at
such time, conducting or about to conduct an underwritten public
offering of equity securities (or securities convertible into
equity securities) and is advised in writing by its managing
underwriter that such offering would in its opinion be adversely
affected by the registration so requested and (iv) shall be
entitled to postpone such requested registration for up to 120
days if the Company determines, in view of the advisability of
deferring public disclosure of material corporate developments or
<PAGE>
<PAGE> 8
other information, that such registration and the disclosure
required to be made pursuant thereto would not be in the best
interests of the Company at such time.
(b) Registration Statement Form. If any registration
requested pursuant to this Section 3 which is proposed by the
Company to be effected by the filing of a registration statement
on Form S-3 (or any successor or similar short-form registration
statement) shall be in connection with an underwritten public
offering, and if the managing underwriter shall advise the
Company in writing that, in its opinion, the use of another form
of registration statement is of material importance to the
success of such proposed offering, then such registration shall
be effected on such other form.
(c) Expenses. In connection with any registration pursuant
to Section 3(a)(I), each Holder will pay (i) a pro rata portion
of the aggregate Registration Expenses (based on the number of
such Holder's Registrable Securities included in a registration
statement at the time the registration statement is filed with
the SEC relative to the total number of securities covered by
such registration statement at such time), (ii) a pro rata
portion (based on the number of such Holder's Registrable
Securities included in a registration statement at the time the
registration statement is filed with the SEC relative to the
total number of securities covered by such registration statement
at such time) of the aggregate fees and disbursements of
underwriters customarily paid by the issuers or sellers of
securities, including liability insurance if the Company so
desires or if the underwriters so require, and the reasonable
fees and expenses of any special experts retained in connection
with the requested registration, (iii) the fees and disbursements
of counsel to such Holder and (iv) all underwriting discounts and
commissions and transfer taxes, if any, applicable to shares of
Registrable Securities to be sold on behalf of such Holder. In
connection with any registration pursuant to Section 3(a)(II),
the Company will pay all of the Registration Expenses, and each
Holder shall pay (i) the fees and disbursements of counsel to
such Holder, (ii) a pro rata portion (based on the number of such
Holder's Registrable Securities included in a registration
<PAGE>
<PAGE> 9
statement at the time the registration statement is filed with
the SEC relative to the total number of securities covered by
such registration statement at such time) of the aggregate fees
and disbursements of underwriters customarily paid by the issuers
or sellers of securities, including liability insurance if the
Company so desires or if the underwriters so require, and the
reasonable fees and expenses of any special experts retained in
connection with the requested registration and (iii) all
underwriting discounts and commissions and transfer taxes, if
any, applicable to shares of Registrable Securities to be sold on
behalf of such Holder.
(d) Effective Registration Statement. A registration
requested pursuant to this Section 3 will not be deemed to have
been effected unless it has become effective, provided that, if
within 180 days after it has become effective the offering of
Registrable Securities pursuant to such registration is
interfered with by any stop order, injunction or other order or
requirement of the SEC or other governmental agency or court,
such registration will be deemed not to have been effected.
(e) Selection of Underwriters. If a requested registration
pursuant to this Section 3 involves an underwritten offering, the
parties hereto shall agree on the choice of investment banker or
bankers and managers to administer the offering.
(f) Priority in Requested Registrations. If a requested
registration pursuant to this Section 3 involves an underwritten
offering and the managing underwriter advises the Company in
writing that, in its opinion, the number of securities requested
to be included in such registration (including securities of the
Company which are not Registrable Securities) exceeds the number
which can be sold in such offering, the Company will include in
such registration (i) first, the number of Registrable Securities
requested to be included in such registration by the Holders (in
proportion (as nearly as practicable) to the number of such
Registrable Securities each Holder requested to be registered
pursuant to Section 3(a)) and (ii) second, other securities,
allocated in such manner as the Company may determine. In the
event that the number of Registrable Securities requested to be
<PAGE>
<PAGE> 10
included in such registration is less than the number which, in
the opinion of the managing underwriter, can be sold, the Company
may include in such registration the securities that the Company
or other holders of securities propose to sell up to the number
of securities that, in the opinion of the managing underwriter,
can be sold and would not be likely to have an adverse effect on
the offering of the Registrable Securities.
Section 4. Registration Procedures. If and whenever the Company
is required to use its best efforts to effect or cause the
registration of any Registrable Securities under the Securities
Act as provided in this Agreement, the Company will, as
expeditiously as reasonably possible:
(i) prepare and file with the SEC a registration
statement with respect to such Registrable Securities and
use its best efforts to cause such registration statement to
become effective, and, upon the request of the Holders of a
majority of the Registrable Securities registered
thereunder, keep such registration statement effective for
up to 90 days, provided, however, that the Company may
discontinue any registration of its securities which is
being effected pursuant to Section 2 at any time prior to
the effective date of the registration statement relating
thereto;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the
prospectus used in connection therewith as may be necessary
to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such
registration statement;
(iii) furnish to each Holder of Registrable Securities
covered by a registration statement (each, a "Seller") such
number of copies of the prospectus included in such
registration statement (including each preliminary
prospectus and summary prospectus), and such other documents
as such Seller may reasonably request in order to facilitate
the disposition of the Registrable Securities by such Seller
<PAGE>
<PAGE> 11
but only while the Company shall be required under the
provisions hereof to cause the registration statement to
remain current;
(iv) use its best efforts to register or qualify such
Registrable Securities covered by such registration
statement under such other securities or blue sky laws of
such jurisdictions as the Sellers shall reasonably request,
except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign
corporation in any jurisdiction where, but for the
requirements of this clause (iv), it would not be obligated
to be so qualified, to subject itself to taxation in any
such jurisdiction, or to consent to general service of
process in any such jurisdiction;
(v) notify each Seller, at any time when a prospectus
relating to the registration statement is required to be
delivered under the Securities Act within the appropriate
period referred to in clause (i) of Section 4, of the
Company's becoming aware that the prospectus included in
such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading in the light of
the circumstances then existing, and at the request of any
Seller, prepare and furnish to each Seller a reasonable
number of copies of an amended or supplemental prospectus as
may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus
shall not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading
in the light of the circumstances then existing;
(vi) otherwise use its best efforts to comply with all
applicable rules and regulations of the SEC, and make
available to its security holders, as soon as reasonably
practicable (but not more than eighteen months) after the
effective date of the registration statement, an earnings
<PAGE>
<PAGE> 12
the Securities Act and the rules and regulations promulgated
thereunder;
(vii) use its best efforts to list or admit for
trading such Registrable Securities on the New York Stock
Exchange and any other securities exchange on which the
Common Stock is then listed, or, if the Common Stock is not
then listed on a securities exchange, on the National
Association of Securities Dealers, Inc. National Market
System ("NASDAQ NMS"), if such Registrable Securities are
not already so listed or admitted for trading and if such
listing or admission is then permitted under the rules of
such exchange or the NASDAQ NMS;
(viii) in the event of any underwritten public
offering, enter into an underwriting agreement with a
managing underwriter or underwriters selected by the Company
containing representations, warranties, indemnities and
agreements then customarily included by an issuer in
underwriting agreements with respect to secondary
distributions, provided that each Seller participating in
such underwriting shall also enter into such agreement;
(ix) obtain a "cold comfort" letter or letters from
the Company's independent public accountants in customary
form and covering matters of the type customarily covered by
"cold comfort" letters as the Sellers shall reasonably
request (provided that Registrable Securities constitute at
least 50% of the securities covered by such registration
statement, unless such a "cold comfort" letter or letters
are provided to the Company or other selling holders in
connection with such registration);
(x) make available for inspection by the Sellers, by
any underwriter participating in any disposition to be
effected pursuant to such registration statement and by any
attorney, accountant or other agent retained by any such
Seller or any such underwriter, all pertinent financial and
other records, pertinent corporate documents and properties
of the Company, and cause all of the Company's officers,
<PAGE>
<PAGE> 13
directors and employees to supply all information reasonably
requested by any Seller, underwriter, attorney, accountant
or agent in connection with such registration statement; and
(xi) obtain for delivery to the underwriter or agent
an opinion or opinions from counsel for the Company in
customary form and in form and scope reasonably satisfactory
to such underwriter or agent and their counsel.
The Company may require each Seller to furnish the Company
with such information regarding such Seller and pertinent to the
disclosure requirements relating to the registration and the
distribution of such securities as the Company may from time to
time reasonably request in writing.
Each Seller agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in
clause (v) of this Section 4, such Seller will forthwith
discontinue disposition of Registrable Securities pursuant to the
registration statement covering such Registrable Securities until
such Seller's receipt of the copies of the supplemented or
amended prospectus contemplated by clause (v) of this Section 4,
and, if so directed by the Company, each Seller will deliver to
the Company (at the Company's expense) all copies, other than
permanent file copies then in such Seller's possession, of the
prospectus covering such Registrable Securities current at the
time of receipt of such notice. In the event the Company shall
give any such notice, the period mentioned in clause (i) of this
Section 4 shall be extended by the number of days during the
period from and including the date of the giving of such notice
pursuant to clause (v) of this Section 4 and to and including the
date when each Seller shall have received the copies of the
supplemented or amended prospectus contemplated by clause (v) of
this Section 4.
Section 5. Indemnification and Contribution.
(a) Indemnification by the Company. In the event of any
registration of any securities of the Company under the
Securities Act pursuant to Section 2 or 3, the Company will, and
<PAGE>
<PAGE> 14
it hereby does, indemnify and hold harmless, to the extent
permitted by law, each Seller and its affiliates, each Person who
participates as an underwriter in the offering or sale of such
securities and each other Person, if any, who controls such
Seller or any such underwriter within the meaning of the
Securities Act (collectively, the "Seller Indemnitees"), against
any and all losses, claims, damages or liabilities, joint or
several, and expenses to which they may become subject under the
Securities Act, common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions or proceedings in
respect thereof, whether or not such Seller Indemnitee is a party
thereto) arise out of or are based upon (a) any untrue statement
or alleged untrue statement of any material fact contained in any
registration statement under which such securities were
registered under the Securities Act, any preliminary, final or
summary prospectus contained therein, or any amendment or
supplement thereto, or (b) any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the
light of the circumstances then existing, and the Company will
reimburse such Seller Indemnitee for any legal or any other
expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, liability,
action or proceeding, provided that the Company shall not be
liable to any Seller Indemnitee in any such case to the extent
that any such loss, claim, damage, liability (or action or
proceeding in respect thereof) or expense arises out of or is
based upon any untrue statement or alleged untrue statement or
omission or alleged omission made in such registration statement
or amendment or supplement thereto or in any such preliminary,
final or summary prospectus in reliance upon and in conformity
with written information furnished to the Company by such Sellers
specifically for use in such registration statement (including
any amendment or supplement thereto and including any
preliminary, final or summary prospectus contained therein), and
provided further that the Company will not be liable to any
Person who participates as an underwriter in the offering or sale
of Registrable Securities or any other Person, if any, who
controls such underwriter within the meaning of the Securities
Act, under the indemnity agreement in this Section 5(a) with
<PAGE>
<PAGE> 15
respect to any preliminary prospectus or the final prospectus or
the final prospectus as amended or supplemented, as the case may
be, to the extent that any such loss, claim, damage or liability
of such underwriter or controlling Person results from the fact
that such underwriter sold Registrable Securities to a person to
whom there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the final prospectus
(including any documents incorporated by reference therein) or of
the final prospectus as then amended or supplemented (including
any documents incorporated by reference therein), whichever is
most recent, if the Company has previously furnished copies
thereof to such underwriter. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on
behalf of any Seller Indemnitee and shall survive the transfer of
such securities by any Seller.
(b) Indemnification by the Sellers. The Company may
require, as a condition to including any Registrable Securities
in any registration statement filed in accordance with Section 4
herein, that the Company shall have received an undertaking
reasonably satisfactory to it from each prospective seller of
such Registrable Securities or any underwriter to indemnify and
hold harmless the Company and all other prospective sellers and
each of their respective affiliates, respective directors and
officers or general and limited partners (and the directors,
officers, affiliates and controlling Persons thereof)
(collectively, the "Company Indemnitees"), in the same manner and
to the same extent as set forth in Section 5(a) in respect of the
Seller Indemnitees, with respect to any statement or alleged
statement in or omission or alleged omission from such
registration statement, any preliminary, final or summary
prospectus contained therein, or any amendment or supplement, if
such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with
information furnished to the Company by such underwriter, or
written information furnished to the Company by such Seller
specifically for use in such registration statement (including
any amendment or supplement thereto and including any
preliminary, final or summary prospectus contained therein).
Such indemnity shall remain in full force and effect regardless
<PAGE>
<PAGE> 16
of any investigation made by or on behalf of the Company or any
of the prospective Sellers, or any of their respective
affiliates, directors, officers or controlling Persons and shall
survive the transfer of such securities by such Seller.
(c) Notice of Claims, Etc. Promptly after receipt by a
Seller Indemnitee or a Company Indemnitee (each, an "Indemnified
Party") of written notice of the commencement of any action or
proceeding with respect to which a claim for indemnification may
be made pursuant to this Section 5, such Indemnified Party will,
if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the
commencement of such action, provided that the failure of the
Indemnified Party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 5, except to the extent
that the indemnifying party is materially prejudiced by such
failure to give notice. In case any such action is brought
against an Indemnified Party, the indemnifying party will be
entitled to participate in and to assume control of the defense
of such action, including any settlement thereof, provided that
the indemnifying party will not agree to any settlement without
the prior consent of the Indemnified Party (which consent shall
not be unreasonably withheld) unless such settlement requires no
more than a monetary payment for which the indemnifying party
agrees to indemnify the Indemnified Party and includes a full,
unconditional and complete release of the Indemnified Person,
provided, however, that the Indemnified Party shall be entitled
to take control of the defense of any claim as to which, in the
reasonable judgment of the indemnifying party's counsel,
representation of both the indemnifying party and the Indemnified
Party would be inappropriate under the applicable standards of
professional conduct due to actual or potential differing
interests between them. After notice has been provided by the
indemnifying party to such Indemnified Party of its election to
assume the defense of any claim pursuant to this Section 5(c),
the indemnifying party will not be liable to such Indemnified
Party for any legal or other expenses subsequently incurred by
the latter in connection with the defense of such claim. In the
event that the indemnifying party does not assume the defense of
<PAGE>
<PAGE> 17
a claim pursuant to this Section 5(c), the Indemnified Party will
have the right to defend such claim by all appropriate
proceedings, and will have control of such defense and
proceedings, provided that no Indemnified Party shall agree to
any settlement without the prior consent of the indemnifying
party (which consent shall not be unreasonably withheld) unless
the Indemnified Party irrevocably waives its right to indemnity
under this Agreement with respect to such settlement. Each
Indemnified Party shall, and shall cause their legal counsel to,
provide reasonable cooperation to the indemnifying party and its
legal counsel in connection with its assuming the defense of any
claim, including the furnishing of the indemnifying party with
all papers served in such proceeding. In the event that an
indemnifying party assumes the defense of an action under this
Section 5(c), then such indemnifying party shall, subject to the
provisions of this Section 5, indemnify and hold harmless the
Indemnified Party from any and all losses, claims, damages or
liabilities by reason of such settlement or judgment.
(d) Other Indemnification. Indemnification similar to that
specified in the preceding subdivisions of this Section 5 (with
appropriate modifications) shall be given by the Company and each
Seller of Registrable Securities with respect to any required
registration or other qualification of securities under any
federal or state law or regulation or governmental authority
other than the Securities Act.
(e) Contribution. If the indemnity provided for in the
foregoing paragraphs of this Section 5 is unavailable or
insufficient for any reason to hold harmless an Indemnified Party
in respect of any losses, claims, damages or liabilities referred
to therein, then the indemnifying party, in lieu of indemnifying
such Indemnified Party, agrees to contribute to the amount paid
or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities in such proportion as is
appropriate to reflect (i) the relative benefits received by the
indemnifying party on the one hand and the Indemnified Party on
the other hand from the sale of securities under such
registration statement, (ii) the relative fault of the
indemnifying party on the one hand and the Indemnified Party on
<PAGE>
<PAGE> 18
the other hand in connection with the statements, actions or
omissions which resulted in such losses, claims, damages or
liabilities and (iii) any other relevant equitable
considerations. The relative fault of the indemnifying party on
the one hand and of the Indemnified Party on the other hand (i)
in the case of an untrue or alleged untrue statement of a
material fact or an omission or alleged omission to state a
material fact, shall be determined by reference to, among other
things, whether such statement or omission relates to information
supplied by the indemnifying party or by the Indemnified Party
respectively and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such
statement or omission and (ii) in the case of any other action or
omission, shall be determined by reference to, among other
things, whether such action or omission was taken or omitted to
be taken by the indemnifying party or the Indemnified Party
respectively and the parties' relative intent, knowledge, access
to information and opportunity to prevent such action or
omission. The parties agree that it would not be just and
equitable if contribution pursuant to this Section 5(e) were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable
considerations referred to in the immediately preceding
sentences. The amount paid or payable by the Indemnified Party
as a result of the losses, claims, damages or liabilities
referred to in such sentences shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with
investigating, preparing to defend or defending any such action
or claim.
(f) Non-Exclusivity. The obligations of the parties under
this Section 5 shall be in addition to any liability which any
party may otherwise have to any other party.
Section 6. Holdback Agreement. If any registration (whether or
not Registrable Securities are included therein) shall be in
connection with an underwritten public offering, the Holder
agrees not to effect any public sale or distribution, including
any sale pursuant to Rule 144 under the Securities Act, of any
<PAGE>
<PAGE> 19
equity securities of the Company, or of any security convertible
into or exchangeable or exercisable for any equity security of
the Company (in each case, other than as part of such
underwritten public offering), within 7 days before or 180 days
(or such lesser period as the managing underwriter may permit)
after the effective date of such registration, and the Company
hereby also so agrees and agrees to use reasonable efforts to
cause each other holder of any equity security, or of any
security convertible into or exchangeable or exercisable for any
equity security, of the Company purchased from the Company (at
any time other than in a public offering or pursuant to a stock
option or other employee benefit plan of the Company) to so
agree.
Section 7. Certain Limitations on Registration Rights.
Notwithstanding the other provisions of this Agreement, the
Company shall not be obligated to register the Registrable
Securities of any Holder (except in accordance with Section
3(a)(II)) unless the Company shall have received, concurrently
with any request for registration hereunder, the written opinion
of counsel to such Holder (which counsel shall be reasonably
satisfactory to the Company and its counsel), stating that the
sale or other disposition of such Holder's Registrable
Securities, in the manner proposed by such Holder, could not be
effected without registering such Registrable Securities under
the Securities Act and that such sale or other disposition could
not be effected pursuant to Rule 144 (or any successor provision)
under the Securities Act or any other registration exemption
under the Securities Act.
Section 8. General Provisions.
(a) Governing Law; Consent to Jurisdiction; Service of
Process. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAW PROVISIONS. EACH
OF THE PARTIES IRREVOCABLY AND UNCONDITIONALLY (A) AGREES THAT
ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING (COLLECTIVELY, "SUIT")
ARISING OUT OF THIS AGREEMENT SHALL BE BROUGHT AND ADJUDICATED IN
THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF NEW
<PAGE>
<PAGE> 20
YORK, (B) SUBMITS FOR ITSELF AND IN RESPECT OF ITS PROPERTY TO
THE JURISDICTION OF ANY SUCH COURT FOR THE PURPOSES OF ANY SUCH
SUIT AND (C) WAIVES AND AGREES NOT TO ASSERT BY WAY OF MOTION, AS
A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ANY CLAIM THAT IT IS NOT
SUBJECT TO THE JURISDICTION OF THE ABOVE COURTS, THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH
SUIT IS IMPROPER. EACH OF THE PARTIES ALSO IRREVOCABLY AND
UNCONDITIONALLY CONSENTS TO THE SERVICE OF ANY PROCESS,
PLEADINGS, NOTICES OR OTHER PAPERS IN A MANNER PERMITTED BY THE
NOTICE PROVISIONS OF SECTION 8(d) HEREOF.
(b) Remedies (1) Each of the Company, on the one hand, and the
Shareowners, on the other, acknowledges and agrees that the other would
not have an adequate remedy at law for money damages in the event
that any of the covenants or agreements in this Agreement of such
party were not performed in accordance with its terms, and it is
therefore agreed that each of the Shareowners and the Company, in
addition to and without limiting any other remedy or right such
party may have, will have the right to an injunction or other
equitable relief in any court of competent jurisdiction, subject
to Section 8(a), enjoining any such breach and enforcing specifically
the terms and provisions hereof. Each of the Shareowners and the
Company hereby waive any and all defenses they may have on the ground
of lack of jurisdiction or competence of the court to grant such an
injunction or other equitable relief.
(ii) All rights, powers and remedies provided under
this Agreement or otherwise available in respect hereof at law or
in equity shall be cumulative and not alternative, and the
exercise or beginning of the exercise of any thereof by any party
shall not preclude the simultaneous or later exercise of any
other such right, power or remedy by such party.
(c) Joint and Several Obligations. All of the covenants,
agreements and obligations of the Shareowners hereunder shall be
joint and several.
(d) Notices. All notices, demands, requests, certificates
or other communications under this Agreement and all legal
<PAGE>
<PAGE> 21
process in regard hereto shall be in writing and shall be decreed
to be validly given, made or served when delivered personally or
deposited in the U.S. mail, postage prepaid, for delivery by
express, registered or certified mail, or delivered to a
recognized overnight courier service guaranteeing next Business
Day delivery, addressed as follows:
If to the Company:
Frontier Corporation
180 South Clinton Avenue
Rochester, New York 14646
Attn: Louis L. Massaro, Corporate Vice President
With required copies to:
Frontier Corporation
180 South Clinton Avenue
Rochester, New York 14646
Attn: Helen A. Zamboni, Corporate Counsel
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017-3909
Attn: Richard I. Beattie
If to Steven C. Simon:
Steven C. Simon
1300 Nicollet Avenue
Suite 218
Minneapolis, Minnesota 55403
With a required copy to:
Maun & Simon, PLC
2900 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-4133
Attn: Albert A. Woodward
<PAGE>
<PAGE> 22
If to James J. Weinert:
James J. Weinert
1300 Nicollet Avenue
Suite 218
Minneapolis, Minnesota 55403
With a required copy to:
Maun & Simon, PLC
2900 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-4133
Attn: Albert A. Woodward
Notices to be given to any other Shareowner shall be sent or
delivered to the address of such other Shareowner as shown in
the stock record book of the Company, or to such other address as
any of the above shall have specified in a notice given pursuant
to this Section 8(d) to all of the others above.
Any notice delivered after business hours or on a Saturday,
Sunday or legal holiday shall be deemed for purposes of computing
any time period hereunder to have been delivered on the next
Business Day.
(e) Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, void, or unenforceable, the remainder
of the terms, provisions, covenants and restrictions shall remain
in full force and effect and shall in no way be affected,
impaired or invalidated. The parties agree that they will use
their best efforts at all times to support and defend this
Agreement.
(f) Amendments. This Agreement may be amended only by an
agreement in writing signed by all of the parties hereto.
(g) Descriptive Headings. Descriptive headings are for
convenience only and shall not control or affect the meaning or
construction of any provision of this Agreement.
<PAGE>
<PAGE> 23
(h) Counterparts. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together,
bears the signatures of each of the parties hereto. This
Agreement may be executed in any number of counterparts, each of
which shall be an original as against the party whose signature
appears thereon, or on whose behalf such counterpart is executed,
but all of which taken together shall be one and the same
statement.
(i) Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of and be enforceable by
the successors and assigns of the parties hereto, provided that a
Shareowner may not assign any of his rights or obligations
hereunder to any Person without the prior written consent of the
Company. Notwithstanding the foregoing, the Company's consent
shall not be required in connection with the assignment of this
Agreement to the estate of a Shareowner, provided that such
estate shall be a "Shareowner" for all purposes of this Agreement
as if such estate were an original signatory hereto and shall be
legally bound by all the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto intending to be
legally bound have duly executed this Agreement, all as of the
day and year first above written.
FRONTIER CORPORATION
By: /s/Louis L. Massaro
--------------------------
Louis L. Massaro
Corporate Vice President
/s/Steven C. Simon
- -------------------------------
Steven C. Simon
/s/James J. Weinert
- -------------------------------
James J. Weinert
<PAGE>1
EXHIBIT 99
Frontier Corporation
Frontier Press Release 180 South Clinton Avenue
Rochester, New York 14646
DATE: After 9:00 a.m., March 20, 1995
CONTACT: Frontier Corporation
Linda J. Crociata, 716-777-7693 (Media)
Philip H. Yawman, 716-777-6179 (Investors)
American Sharecom
William King, Chief Financial Officer, 612-343-3263
SUMMARY: FRONTIER CORP FINALIZES PURCHASE OF AMERICAN SHARECOM
Rochester, New York -- March 20, 1995 -- Frontier Corporation
(NYSE: FRO) has finalized the acquisition of American Sharecom,
Inc. (ASI), a long distance company headquartered in Minneapolis,
Minnesota. Frontier's acquisition of all of the outstanding
shares of ASI was completed as of the close of business on
Friday, March 17, 1995.
ASI is one of the largest privately owned long distance
companies in the country with annual revenues of approximately
$125 million. ASI's sales operations are concentrated in the
Midwest, Northwest and California. Frontier Communications
International, Frontier Corporation's long distance subsidiary,
will establish Minneapolis as the focal point for its long
distance sales and operations in the upper Midwest. Frontier
Corporation also operates a 100,000 access-line telephone company
in Minnesota, Frontier Communications of Minnesota. A cellular
acquisition in southern Minnesota is pending. These operations
will form the building blocks for fulfilling Frontier's corporate
strategy of offering integrated services.
<PAGE>
<PAGE> 2
Under terms of the agreement, Frontier has acquired all of
the outstanding shares of ASI in exchange for 8.7 million shares
of new Frontier common stock. The tax deferred exchange will be
accounted for as a pooling of interests. The transaction was
previously announced on November 30, 1994.
Commenting on the transaction, Ronald L. Bittner, Chairman
and Chief Executive Officer of Frontier Corporation, said, "The
addition of American Sharecom represents a major step toward our
goal of creating the premier firm in our industry. Steve Simon,
president of ASI and Jim Weinert, vice president, have built one
of the finest, independent long distance companies in the
industry. This merger is consistent with our growth strategy of
expanding our long distance operations nationwide."
Simon will become a vice president of the combined long
distance operation, with responsibilities for the American
Sharecom Division. Weinert will remain in charge of American
Sharecom's sales and marketing organization.
Founded in 1920, Frontier is one of the largest non-Bell
telecommunications firms in the United States, with 1994 revenues
of $985 million. The company is a provider of integrated
telecommunications solutions to more than 1.5 million customers
in the Northeast, South and Midwest through its long distance,
local telephone and wireless communication companies. Its long
distance operation, which is now the seventh largest in the U.S.,
provides a full range of voice, video and data communications
services for business and residential customers.
