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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
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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As previously reported, Frontier Corporation finalized the
acquisition of American Sharecom, Inc., a long distance company
headquartered in Minneapolis, Minnesota, on March 17, 1995. The
Stock Acquisition Agreement ("Agreement") was previously filed in
redacted form on Form 8-K on March 22, 1995. This Form 8-K/A
contains a refiling of the Agreement and includes Amendments 1 and
2 and various schedules to the previously filed Agreement, all in
redacted form. Confidential treatment requests have been filed for
both the 8-K and 8-K/A.
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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: May 9, 1995 By: /s/Barbara J. LaVerdi
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Barbara J. LaVerdi
Assistant Secretary
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EXHIBIT INDEX
Exhibit Number Description
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2-1 Stock Acquisition Agreement Filed herewith
2-2 Amendment 1 to Stock Filed herewith
Acquisition Agreement
2-3 Amendment 2 to Stock Filed herewith
Acquisition Agreement
2-4 Schedules to Stock Filed herewith
Acquisition Agreement
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THE CONFIDENTIAL PORTIONS HAVE BEEN SO OMITTED AND
FILED SEPARATELY WITH THE COMMISSION.
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EXHIBIT 2-1
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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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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,
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(ii) settle or compromise XXXXXXXX in any manner that may
adversely 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.
<PAGE>
<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>
<PAGE> 52
TABLE OF CONTENTS
ARTICLE I. CONVEYANCE OF STOCK 1
ARTICLE II. CLOSING 2
ARTICLE III. REPRESENTATIONS AND WARRANTIES
OF THE SELLERS AND ASI 2
3.1 Incorporation 2
3.2 Capitalization of ASI; Corporate Documents 3
3.3 Title to ASI Stock 3
3.4 Status of ASI Stock 3
3.5 Capacity of ASI Stock Owners 3
3.6 No Right of First Refusal 4
3.7 Financial Statements 4
3.8 Business Since September 30, 1994 5
3.9 Litigation, Claims 7
3.10 Compliance with Laws 8
3.11 Patents, Trademarks, Miscellaneous
Intellectual Property 8
3.12 Insurance 9
3.13 Indebtedness 9
3.14 Correct Records 10
3.15 Contracts 10
3.16 Employee Benefit Plans 11
3.17 Titles, Real Property Matters 11
3.18 Consents 12
3.19 No Defaults 12
3.20 Qualification/Subsidiaries and Other Interests 13
3.21 Brokers 13
3.22 Employees 14
3.23 Corporate and Sellers' Action 14
3.24 Liabilities 15
3.25 Accounts Receivable and Non-Current Receivables 15
3.26 Tax Returns 15
3.27 Banks 16
3.28 Disclosure by the Sellers and ASI 16
3.29 Conflict of Interest 17
3.30 Expenses 17
3.31 Securities Law Reporting 17
<PAGE>
<PAGE> 53
3.32 Environmental Matters 17
3.33 Americans With Disabilities Act 18
3.34 Securities Laws Compliance 18
3.35 Status of Value Drivers 19
3.36 Distribution History 19
ARTICLE IV. ROCHESTER'S REPRESENTATIONS AND WARRANTIES 19
4.1 Incorporation 19
4.2 No Defaults 19
4.3 Corporate Action of Rochester 20
4.4 Disclosure by Rochester 20
4.5 Brokers 20
ARTICLE V. COVENANTS OF THE SELLERS AND ASI
PENDING CLOSING 21
5.1 Maintenance of Business 21
5.2 Negative Covenants 21
5.3 Organization, Good Will 23
5.4 Access to Plants, Files and Records 23
5.5 Actions Not Affect Accounting Treatment 24
5.6 Third Party Consents 24
5.7 Securities Laws 24
5.8 Notice of Proceedings 24
5.9 Delivery of ASI's Shareholder Lists 24
5.10 Confidential Information 25
5.11 Transition to RCI Long Distance, Inc.; Network
Matters 25
ARTICLE VI. COVENANTS OF ROCHESTER PENDING ACQUISITION 26
6.1 Corporate Action 26
6.2 Confidential Information 26
6.3 Notice of Proceedings 26
ARTICLE VII. CONDITIONS TO THE OBLIGATIONS OF THE
SELLERS AND ASI 27
7.1 Representations, Warranties, Covenants 27
7.2 Proceedings 27
7.3 Proceedings and Instruments Satisfactory 27
7.4 Delivery of Rochester Stock 28
7.5 Registration Rights Agreement 29
7.6 Registered Shares 29
<PAGE>
<PAGE> 54
ARTICLE VIII. CONDITIONS TO THE OBLIGATIONS OF ROCHESTER 29
8.1 Representations, Warranties, Covenants 29
8.2 Proceedings 30
8.3 No Casualty 30
8.4 Proceedings and Instruments Satisfactory 30
8.5 Delivery of ASI Common Stock 30
8.6 Consents of ASI's Creditors and Others 31
8.7 No Change in ASI's Capitalization 31
8.8 Resolutions and Resignation of ASI's Directors 31
8.9 Certificates of Good Standing 31
8.10 Certified Articles 32
8.11 Certified Bylaws 32
8.12 Certificate of Incumbency 32
8.13 Corporate Actions 32
8.14 Employment and Non-Compete Agreements 32
8.15 Financial Statements 33
8.16 Billing System License 33
8.17 Escrow Agreement 33
8.18 Pooling Opinion 34
ARTICLE IX. MUTUAL COVENANTS AND CONDITIONS TO
OBLIGATIONS OF ASI AND ROCHESTER 34
9.1 Applications to the Commissions 34
9.2 Necessity for Commission Approvals 34
9.3 Other Filings 35
ARTICLE X. GENERAL INDEMNITY AGREEMENTS 36
10.1 Sellers' Litigation Indemnity Agreements 36
10.2 Sellers' Other Indemnity Agreements 36
10.3 Rochester's Indemnity Agreements 37
10.4 Limitation of Amount 37
10.5 No Limitation 37
10.6 Procedure for General Claims 38
10.7 Procedure for Article X Third Party Claims 38
ARTICLE XI. XXXXXXXXXXXXX INDEMNIFICATION 41
11.1 XXXXXXXXXXXX Defined 41
11.2 Indemnification From Escrow Fund 41
11.3 Procedure for Claims 41
11.4 Defense 43
11.5 Settlement or Decision 43
<PAGE>
<PAGE> 55
ARTICLE XII. SURVIVAL OF REPRESENTATIONS AND WARRANTIES 44
12.1 Survival 44
ARTICLE XIII. MISCELLANEOUS 44
13.1 Abandonment of Transaction 44
13.2 Effect of Termination or Abandonment 45
13.3 Liabilities 45
13.4 Assignment 45
13.5 Further Assurances 45
13.6 Notices 46
13.7 Entire Agreement 47
13.8 Rules of Construction 47
13.9 Law Governing 48
13.10 Waiver of Provisions 48
13.11 Successors 48
13.12 Counterparts 49
13.13 Public Statements or Releases 49
13.14 Severability 49
13.15 No Third Party Beneficiaries 49
13.16 Dispute Resolution 50
<PAGE>
<PAGE> 1
EXHIBIT 2-2
=================================
AMENDMENT NUMBER ONE
TO
STOCK ACQUISITION AGREEMENT
BY AND AMONG
FRONTIER CORPORATION,
AMERICAN SHARECOM, INC.,
STEVEN C. SIMON
AND JAMES J. WEINERT
THIS AMENDMENT NUMBER ONE ("Amendment") is made as of February
20, 1995, to that certain Stock Acquisition Agreement
("Agreement"), dated as of November 29, 1994, by and among FRONTIER
CORPORATION (formerly known as Rochester Telephone Corporation), a
New York business corporation ("Frontier"), 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, in the Agreement, the parties agreed that the
Acquisition (as defined in the Agreement; all capitalized terms not
defined herein shall have the meanings ascribed to them in the
Agreement) contemplated therein will be accounted for by Frontier
as a "pooling of interests"; and
WHEREAS, it has come to the attention of the parties that
certain of the provisions of the Agreement must be amended to allow
Frontier to use such accounting treatment for the Acquisition.
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained in this Amendment, the parties
hereto do hereby agree to amend and restate in their entirety
Sections 10.2, 10.3 and 12.1 of the Agreement as set forth herein:
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 Frontier 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
<PAGE>
<PAGE> 2
the Closing), the Sellers, jointly and severally, shall, for a
period ending on the earlier of the first anniversary of the
consummation of the transactions contemplated by this Agreement or
the date on which is issued the first independent audit of the
financial statements of the combined results of ASI and Frontier
(the "Indemnification Expiration Date"), indemnify Frontier and ASI
against and hold Frontier 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
Indemnification Expiration Date. If an Article X Notice of Claim
has been delivered prior to the Indemnification Expiration Date,
any and all such Losses, whether incurred prior thereto or
thereafter, shall be subject to indemnification under this Section
10.2.
10.3 Frontier's Indemnity Agreements. Except as provided in
Article XI below, with respect to all representations and
warranties made by Frontier in this Agreement (and/or in the
Exhibits and Schedules attached hereto and the documents to be
delivered by Frontier at the Closing), Frontier shall, until the
Indemnification Expiration 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 Frontier prior to the
Indemnification Expiration Date. If an Article X Notice of Claim
has been delivered prior to the Indemnification Expiration Date,
any and all such Losses, whether incurred prior thereto or
thereafter, shall be subject to indemnification under this Section
10.3.
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
Indemnification Expiration Date, regardless of any investigation or
<PAGE>
<PAGE> 3
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.
IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed and their corporate seals, if applicable, to be
hereunto affixed, effective as of the day and year first above
written.
/s/S. C. Simon
-----------------------------
Steven C. Simon
/s/James J. Weinert
-----------------------------
James J. Weinert
FRONTIER CORPORATION
/s/Louis L. Massaro
By: --------------------------
Louis L. Massaro
Corporate Vice President
AMERICAN SHARECOM, INC.
/s/S. C. Simon
By: --------------------------
Steven C. Simon
Its: President
<PAGE>
<PAGE> 4
STATE OF MINNESOTA ) ss:
COUNTY OF HENNEPIN )
On February 24, 1995, before me personally came Steven C.
Simon to me known to be the individual described in, and who
executed the foregoing Agreement, and acknowledged that he executed
the same on behalf of himself as a Seller hereunder and as the
President of AMERICAN SHARECOM, INC.
/s/William J. King
------------------------
Notary Public
STATE OF MINNESOTA ) ss:
COUNTY OF HENNEPIN )
On February 24, 1995, before me personally came James J.
Weinert to me known to be the individual described in, and who
executed the foregoing Agreement, and acknowledged that he executed
the same.
/s/William J. King
------------------------
Notary Public
STATE OF NEW YORK )
COUNTY OF MONROE ) ss:
On February 20, 1995, before me personally came Louis L.
Massaro, to me known, who, being by me duly sworn, did depose and
say that deponent is the Corporate Vice President of FRONTIER
CORPORATION, the corporation described in and which executed the
foregoing Agreement; deponent has executed the Agreement by order
of the Board of Directors of such corporation.
/s/Karen J. Cronk
------------------------
Notary Public
<PAGE>
<PAGE> 1
EXHIBIT 2-3
===========================================
AMENDMENT NUMBER TWO
TO
STOCK ACQUISITION AGREEMENT
BY AND AMONG
FRONTIER CORPORATION,
AMERICAN SHARECOM, INC.,
STEVEN C. SIMON
AND JAMES J. WEINERT
THIS AMENDMENT NUMBER TWO ("Amendment") is made as of March 3,
1995, to that certain Stock Acquisition Agreement ("Agreement"),
dated as of November 29, 1994, as amended by Amendment Number One
dated as of February 20, 1995, by and among FRONTIER CORPORATION
(formerly known as Rochester Telephone Corporation), a New York
business corporation ("Frontier"), 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, in the Agreement, the parties agreed that, at the
Closing of the Acquisition (as defined in the Agreement; all
capitalized terms not defined herein shall have the meanings
ascribed to them in the Agreement) certain shares of the Frontier
Stock ( the "Rochester Stock" in the Acquisition Agreement) would
be registered; and
WHEREAS, for good reasons, Frontier and the Sellers have
agreed that such registration would not be in the best interests of
Frontier and the Sellers, as significant shareholders of Frontier
after the Closing.
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements contained in this Amendment, the parties
hereto do hereby agree to amend the Agreement as follows:
1. Section 7.6 shall be deleted from the Agreement in its
entirety and any reference elsewhere in the Agreement to
Section 7.6 or the Registered Shares shall likewise be
deleted as if such Section 7.6 and the terms and
conditions contained therein had never been a part
thereof.
<PAGE>
<PAGE> 2
IN WITNESS WHEREOF, the parties have caused this Amendment to
be executed and their corporate seals, if applicable, to be
hereunto affixed, effective as of the day and year first above
written.
/s/S. C. Simon
--------------------------
Steven C. Simon
/s/James J. Weinert
--------------------------
James J. Weinert
FRONTIER CORPORATION
By: /s/Louis L. Massaro
-----------------------
Louis L. Massaro
Corporate Vice President
AMERICAN SHARECOM, INC.
By: /s/S. C. Simon
-----------------------
Steven C. Simon
Its: President
<PAGE>
<PAGE> 3
STATE OF MINNESOTA ) ss:
COUNTY OF HENNEPIN )
On March 17, 1995, before me personally came Steven C. Simon
to me known to be the individual described in, and who executed the
foregoing Agreement, and acknowledged that he executed the same on
behalf of himself as a Seller hereunder and as the President of
AMERICAN SHARECOM, INC.
/s/Jennifer A. Tenenbaum
------------------------------
Notary Public
STATE OF MINNESOTA ) ss:
COUNTY OF HENNEPIN )
On March 17, 1995, before me personally came James J. Weinert
to me known to be the individual described in, and who executed the
foregoing Agreement, and acknowledged that he executed the same.
/s/Jennifer A. Tenenbaum
------------------------------
Notary Public
STATE OF NEW YORK )
COUNTY OF MONROE ) ss:
On March 3, 1995, before me personally came Louis L. Massaro
to me known, who, being by me duly sworn, did depose and say that
deponent is the Corporate Vice President of FRONTIER CORPORATION,
the corporation described in and which executed the foregoing
Agreement; deponent has executed the Agreement by order of the
Board of Directors of such corporation.
/s/Helen A. Zamboni
-----------------------------
Notary Public
<PAGE>
<PAGE> 1
THE CONFIDENTIAL PORTIONS HAVE BEEN SO OMITTED AND
FILED SEPARATELY WITH THE COMMISSION
==================================================
EXHIBIT 2-4
==================================================
SCHEDULE 3.1
- ------------
ARTICLES OF INCORPORATION
OF
SHARECOM INC.
To form a corporation pursuant to the Minnesota Business
Corporation Act, the following Articles of Incorporation are
adopted:
1. The name of this corporation is Sharecom Inc.
2. This corporation shall have general business purposes and
shall have unlimited power to engage in and do any lawful act
concerning any and all lawful businesses for which corporations may
be organized under the Minnesota Business Corporation Act. Without
limiting the generality of the foregoing, this corporation shall
have specific power:
(a) to engage in whole or in part in the business of lending
or advancing money on the security of goods, wares and merchandise
whether or not such goods, wares and merchandise are sold by this
corporation;
(b) to become surety for or guarantee the carrying out and
performance of any contract, lease, or obligation of any kind or
any person, firm or corporation in connection with the carrying on
of any business; and
(c) to acquire, hold, pledge, mortgage, hypothecate, sell, or
otherwise dispose of the shares, bonds, securities and other
evidences of indebtedness of any person, firm or corporation.
3. This corporation shall have perpetual existence.
4. The location and post office address of the registered
office in Minnesota is 416 E. Hennepin Avenue, Minneapolis,
Minnesota 55414.
<PAGE>
<PAGE> 2
5. The total authorized number of shares of this corporation
is 250,000, all of which shall be common shares of the par value of
$.10 (10 cents) each. 6. The shareholders of this corporation:
(a) shall not have the right to cumulate votes for the
election of directors;
(b) shall have no preemptive right to subscribe to any issue
of shares of any class of this corporation now or hereafter made;
and
(c) shall have the power, by the affirmative vote of the
holders of a majority of the outstanding shares entitled to vote
thereon, (i) to authorize the sale, lease, exchange, or other
disposal of all, or substantially all, of the property and assets
of this corporation, including its good-will, (ii) to amend the
Articles of Incorporation of this corporation, and (iii) to adopt
an agreement of consolidation or merger.
7. The amount of stated capital with which this corporation
may begin business is $1,000.00.
8. The name and post office address of the first director,
who shall serve until the first annual meeting of the shareholders
or until his successors are elected and qualified are:
Name Post Office Address
- -------------------- -----------------------------
Thomas L. Frondell 3342 Xylon Avenue North
Minneapolis, Minnesota 55427
9. The name and post office address of the incorporator, who
is a natural person of full age, is:
Name Post Office Address
- -------------------- -----------------------------
Thomas L. Frondell 3342 Xylon Avenue North
Minneapolis, Minnesota 55427
10. The board of directors of this corporation shall have
authority:
<PAGE>
<PAGE> 3
(a) to allot and authorize the issuance of the authorized but
unissued shares of this corporation, including the declaration of
dividends payable in shares of any class to shareholders of any
other class;
(b) to fix the terms, provisions and conditions of and
authorize the issue, sale, pledge or exchange of bonds, debentures,
notes and evidences of indebtedness;
(c) to fix the terms, provisions and conditions of and
authorize the issue, sale or exchange of (i) rights to convert any
securities of this corporation into shares of any class or classes,
including the conversion into shares of any class or classes,
including the conversion basis or bases; and (ii) options to
purchase or subscribe for shares of any class or classes, including
the option price or prices at which shares may be purchased or
subscribed for;
(d) to make, amend and repeal the bylaws, including an
increase in their number, subject to the power of the shareholders
to amend or repeal such bylaws;
(e) to provide for the reasonable compensation of its own
members in their status as directors, officers and employees, and
all other officers and employees, including, but not limited to,
salaries, pension, profit sharing, stock option, stock purchase,
stock bonus, retirement, benefit, cash bonus and deferred payment
plans, trusts and other provisions, and other forms of incentive
and compensation;
(f) to adopt an indemnity plan and to purchase and maintain
insurance for officers, directors, employees and agent against
liability asserted against them and incurred in any such capacity
or arising out of their statutes as such, to the fullest extent now
or hereafter permitted by law; and
(g) in addition, to exercise all powers and to do such acts
that may be exercised on done by this corporation, subject only to
the provisions of these articles of incorporation and the bylaws of
this corporation.
<PAGE>
<PAGE> 4
IN WITNESS WHEREOF, the undersigned incorporator has executed
these Articles of Incorporation on May 27, 1980.
Dated: May 27, 1980 /s/Thomas L. Frondell
------------------------------
STATE OF MINNESOTA )
COUNTY OF RAMSEY ) SS.
The foregoing instrument was acknowledged before me this 27th
day of May, 1980, by Thomas L. Frondell.
/s/John P. Vitko
-----------------------------
Notarial Seal Notary Public
<PAGE>
<PAGE> 5
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF
SHARECOM INC.
We, the undersigned, Thomas L. Frondell and David D. Ekelund,
respectively, the President and Secretary of Sharecom Inc., a
corporation subject to the provisions of Chapter 301, Minnesota
Statutes 1953, known as the Minnesota Business Corporation Act, do
hereby certify that at a special meeting of the Shareholders of
said Corporation, notice of such meeting, proposal to amend and
nature of each proposal having been mailed to each Shareholder
entitled to vote thereon at least ten days prior to such meeting,
held at 416 East Hennepin Avenue, in the City of Minneapolis,
County of Hennepin, as designated in such notice, on the 6th day of
October, 1981, resolutions as hereinafter set forth were adopted by
a vote of said Shareholders represented in person or by proxy:
"Resolved that Article 5 of the Articles of Incorporation of
Sharecom Inc. be, and the same hereby is amended to read as
follows:
5. The total authorized number of shares of this
corporation is 1,250,000, all of which shall be
common shares of the par value of $.04 (4 cents)
each.
"Resolved further that the President and Secretary of this
Corporation be and they hereby are, authorized and directed to
make, execute and acknowledge a certificate under the corporate
seal of this corporation, embracing the foregoing resolutions, and
to cause such certificate to be filed for record in the manner
required by law."
<PAGE>
<PAGE> 6
IN WITNESS WHEREOF, we have subscribed our names and caused
the corporate seal of said corporation to be hereto affixed this
6th day of October, 1981.
In presence of:
/s/Linda A. Jessen /s/Thomas L. Frondell
- --------------------------- ---------------------------
Its President
/s/Kathleen A. Mehle /s/David D. Ekelund
- --------------------------- ---------------------------
Its Secretary
AFFIX CORPORATE SEAL
STATE OF MINNESOTA )
COUNTY OF HENNEPIN ) ss.
Thomas L. Frondell and David D. Ekelund, being first duly sworn, on
oath depose and say that they are respectively the President and
Secretary of Sharecom Inc., the corporation named in the foregoing
certificate; that said certificate contains a true statement of the
action of the Shareholders and Board of Directors of said
corporation, duly held as aforesaid; that the seal attached is the
corporate seal of said corporation; that said corporation is
executed on behalf of said corporation, by its express authority;
and they further acknowledge the same to be their free act and deed
and the free act and deed of said corporation.
/s/Thomas L. Frondell
--------------------------
/s/David D. Ekelund
--------------------------
Subscribed and sworn to
before me this 12th day
of October, 1981.
/s/Kathleen A. Mehle
- -----------------------
Notary
<PAGE>
<PAGE> 7
CERTIFICATE OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
SHARECOM, INC.
Thomas Frondell and David D. Ekelund, respectively the
President and Secretary of Sharecom, Inc., a corporation organized
under and existing by virtue of the laws of the State of Minnesota,
do hereby certify that at a special meeting of the shareholders of
the corporation, duly called in accordance with the Articles of
Incorporation and By-Laws of said Corporation, and in accordance
with the laws of the State of Minnesota, held in the City of
Minneapolis, Minnesota, on the 16th day of May, 1983, the
shareholders of said corporation adopted the following resolutions:
"RESOLVED, that pursuant to Minnesota Statute, Section
302A.021, Subd. 4, this Corporation hereby elects to become
governed by Chapter 302 of Minnesota Statutes, known as
the, and the President and Secretary of this Corporation
be and the same hereby are authorized to prepare and file a
Certificate attesting to the due and valid adoption of this
resolution as required by law; and
"RESOLVED FURTHER, that Article Five of the Articles of
Incorporation of this Corporation be and hereby is amended in
its entirety to read as follows:
'5. The total authorized number of shares of this
Corporation shall be Ten Million (1O,OOO,OO0), all
of which shall be common shares without par value.'"
IN WITNESS WHEREOF the undersigned have executed this
Certificate this 16th day of May, 1983.
/s/Thomas L. Frondell
------------------------
/s/David D. Ekelund
------------------------
<PAGE>
<PAGE> 8
STATE OF MINNESOTA )
COUNTY OF HENNEPIN ) ss.
On this 16th day of May, 1983, before me, a Notary Public,
personally appeared Thomas Frondell, to me known to be the
President of Sharecom, Inc., a Minnesota corporation, who
acknowledged to me that he executed the foregoing instrument as the
free act and deed of said Corporation.
/s/Albert A. Woodward
---------------------------
Notary Public
STATE OF MINNESOTA )
COUNTY OF HENNEPIN ) ss.
On this 16th day of May, 1983, before me, a Notary Public,
personally appeared David D. Ekelund, to me known to be the
Secretary of Sharecom, Inc., a Minnesota corporation, who
acknowledged to me that he executed the foregoing instrument as the
free act and deed of said corporation.
/s/Albert A. Woodward
---------------------------
Notary Public
<PAGE>
<PAGE> 9
CERTIFICATE OF CHANGE OF REGISTERED OFFICE
by
SHARECOM INC.
Pursuant to Minnesota Statutes Section 301.33 or 317.19, the
undersigned, S. C. Simon, hereby certifies that the Board of
Directors of Sharecom Inc., a Minnesota corporation, has resolved
to change the corporation's registered office from:
416 E. Hennepin Avenue Minneapolis Hennepin 55414
- -----------------------------------------------------------------
(no. & street) (city) (county) (zip)
to
1300 Nicollet Mall, Suite 218 Minneapolis Hennepin 55403
- -----------------------------------------------------------------
(no. & street) (city) (county) (zip)
The effective date of the change will be the 15th day of
August, 1983 or the day of filing of this certificate with the
Secretary of State, whichever is later.
DATED August 15, 1983 SIGNED /s/S. C. Simon
---------------------
S. C. Simon
President
---------------------
(title or office)
<PAGE>
<PAGE> 10
CERTIFICATE OF AMENDMENT TO
ARTICLES OF INCORPORATION OF
SHARECOM, INC.
Steven C. Simon and David Ekelund, respectively, the President
and Secretary of Sharecom, Inc., a corporation organized under and
existing by virtue of the laws of the State of Minnesota, do hereby
certify that at a meeting of the shareholders of the corporation,
duly called in accordance with the Articles of Incorporation and
By-Laws of said corporation, and in accordance with the laws of the
State of Minnesota, held in the City of Minneapolis, Minnesota, on
the 17th day of November, 1983, the shareholders of said
corporation adopted the following resolutions amending the Articles
of Incorporation of this Corporation:
"RESOLVED, that Article One of the Articles of Incorporation
be and hereby is amended in its entirety to read as follows:
'1. The name of this Corporation is American Sharecom,
Inc.'
"RESOLVED FURTHER, that Article Five of the Articles of
Incorporation of this Corporation be and hereby is amended in its
entirety to read as follows:
'5. The total authorized number of shares of this
Corporation shall be Ten Million (10,000,000), all
of which shall be one cent ($.01) par value.'"
IN WITNESS WHEREOF, we have hereunto set our names this 17th
day of November, 1983.
In presence of:
/s/Albert A. Woodward /s/S. C. Simon
- -------------------------- ------------------------
Steven C. Simon
/s/Wm. H. Thomas
- -------------------------- /s/David D. Ekelund
------------------------
David Ekelund
<PAGE>
<PAGE> 11
STATE OF MINNESOTA )
COUNTY OF HENNEPIN ) ss.
Steven C. Simon and David Ekelund, being first duly sworn,
depose and say that they are respectively the President and
Secretary of Sharecom, Inc., a Minnesota corporation; that they
executed the foregoing certificate; that the contents thereof are
true; that they take this action pursuant to authority conferred
upon them by the Board of Directors of said corporation; and that
they make this Affidavit for and in behalf of said corporation.
/s/S. C. Simon
----------------------------
Steven C. Simon
/s/David D. Ekelund
----------------------------
David Ekelund
Subscribed and sworn to
before me this 17th day
of November, 1983.
/s/Albert A. Woodward
- --------------------------
Notary Public
<PAGE>
<PAGE> 12
STATEMENT OF CHANGE OF REGISTERED OFFICE
AND/OR REGISTERED AGENT
Pursuant to Minnesota Statutes, Section 302A.123, the
undersigned corporation submits the following statement for the
purpose of changing its registered office or its registered agent,
or both:
1. Name of corporation: American Sharecom, Inc.
2. Address of its present registered office: 1300 Nicollet Mall,
#218, Minneapolis, MN 55403.
3. Address to which its registered office is to be changed:
c/o C T CORPORATION SYSTEM INC., 405 Second Avenue South,
Minneapolis, Hennepin County, Minnesota 55401.
4. Name of present registered agent: American Sharecom, Inc.
5. Name of successor registered agent: C T CORPORATION SYSTEM
INC.
The address of the registered office and the address of the
business office of the registered agent, as changed, will be
identical.
Such change was authorized by resolution approved by the
affirmative vote of a majority of directors present.
Dated: November 25, 1987 SIGNED /s/S. C. Simon
-----------------------
President
Filing Fee: $25.00
STATE OF MINNESOTA
County of HENNEPIN
The foregoing instrument was acknowledged before me this 25th
day of November, 1987.
/s/William J. King
------------------------
Notary Public
<PAGE>
<PAGE> 13
CERTIFICATE OF AMENDMENT
TO ARTICLES OF INCORPORATION
AMERICAN SHARECOM, INC.
James J. Weinert, the Secretary of American Sharecom, Inc., a
corporation organized under and existing by virtue of the laws of
the State of Minnesota, does hereby certify that at a regular
meeting of the shareholders of the corporation, duly called in
accordance with the Articles of Incorporation and Bylaws of such
corporation, and in, accordance with the laws of the State of
Minnesota, held in the City of Minneapolis, Minnesota, at 8:30 a.m.
on the 20th day of April, 1989, the shareholders of said
corporation duly adopted the following resolution amending the
Articles of Incorporation of this corporation:
"RESOLVED, that the Articles of Incorporation of this
corporation be, and the same hereby are, amended by adding thereto
a new Article 11 as follows:
"11. Limitation of Director Liability. To the fullest extent
permitted by the Minnesota Business Corporation Act as
the same exists or may hereafter be amended, a director
of the corporation shall not be personally liable to the
corporation or its shareholders for monetary damages for
breach of fiduciary duty as a director."
IN WITNESS WHEREOF, I have hereunto set my name this 20th day
of April, 1989.
/s/James J. Weinert
-----------------------------
James J. Weinert, Secretary
<PAGE>
<PAGE> 14
STATE OF MINNESOTA )
COUNTY OF HENNEPIN ) ss.
James J. Weinert, being first duly sworn, deposes and states
that he is the Secretary of American Sharecom, Inc., a Minnesota
corporation; that he executed the foregoing Certificate; that the
contents thereof are true; that he takes this action pursuant to
authority conferred upon him by the board of directors of said
corporation; that he makes this affidavit for and on behalf of said
corporation.
/s/ James J. Weinert
--------------------
James J. Weinert
Subscribed and sworn to before me this 20th day of April, 1989.
/s/ Stephen M. Magistad
- -----------------------
Stephen M. Magistad
<PAGE>
<PAGE> 15
PLAN AND ARTICLES OF MERGER
THIS PLAN AND ARTICLES OF MERGER is made by and between
American Sharecom, Inc., a Minnesota Corporation and Wisconsin
American Sharecom, Inc., a Wisconsin Corporation:
WITNESSETH;
WHEREAS, Wisconsin American Sharecom, Inc., is a wholly-owned
subsidiary of American Sharecom, Inc.; and
WHEREAS, the Boards of Directors of Wisconsin American
Sharecom, Inc., and American Sharecom, Inc., have determined that
Wisconsin American Sharecom, Inc. shall be merged into American
Sharecom, Inc. in accordance with applicable statutes of the States
of Minnesota and Wisconsin dealing with the merger of a subsidiary
corporation into its parent corporation.
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein contained, American Sharecom, Inc. and
Wisconsin American Sharecom, Inc. agree as follows:
1. Names of the Subsidiary Corporation and the
Parent/Surviving Corporation.
The name of the Subsidiary Corporation is Wisconsin American
Sharecom, Inc., a Wisconsin Corporation (hereinafter "WASI"). The
name of the Parent Corporation is American Sharecom, Inc., a
Minnesota Corporation, which shall be the Surviving Corporation
(hereinafter "ASI").
2. Terms and Conditions of Merger; Manner and Basis of
Converting the Shares of WASI into Cash or other Property.
ASI is the sole shareholder of WASI. WASI shall be merged into
ASI and the separate existence of WASI shall thereupon cease. The
issued and outstanding common stock of WASI, no par value, shall be
surrendered and cancelled. ASI, the Surviving Corporation, shall
possess all the rights, privileges, immunities, powers and purposes
of WASI. All the property, real, personal and mixed, tangible and
intangible, of WASI, and all debts due on whatever account by it,
all as the same shall exist and to the extent of WASI's right,
title and interest therein shall vest in ASI, the Surviving
<PAGE>
<PAGE> 16
Corporation, without further act or demand: and all such rights,
privileges, immunities, powers and purposes and all and every other
interest of WASI shall be thereafter as effectively the property of
ASI, the Surviving Corporation, as they whereof WASI; and the title
to and interest in any real estate vested by deed, lease or
otherwise, under the laws of the United States or any state thereof
or any foreign country shall not revert or in any way be impaired.
ASI, the Surviving Corporation, shall be responsible for all
liabilities and obligations of WASI.
3. Number of Outstanding Shares.
WASI has only one class of stock, being common stock, no par
value. The number of outstanding shares thereof is 1,000, all of
which are owned by ASI.
4. Waiver of Mailing.
As the sole shareholder of WASI, ASI waives the mailing of a
copy of this Plan and Articles of Merger.
5. Approval.
This Plan and Articles of Merger has been approved by ASI and
WAST in accordance with applicable statutes of the States of
Minnesota and Wisconsin.
6. Registered Offices.
The registered office of ASI is located in Hennepin County,
Minnesota. The registered office of WASI is located in Dane County,
Wisconsin.
7. Service of Process.
ASI may be served with process in Wisconsin in any proceeding
for the enforcement of any obligation of WASI. The Secretary of
State of Wisconsin is hereby irrevocably appointed ASI's agent to
accept service of process in any such proceeding. The Secretary of
State of Wisconsin shall direct any process served to ASI; as
follows:
<PAGE>
<PAGE> 17
American Sharecom, Inc.
1300 Nicollet Mall
Suite 218
Minneapolis, Minnesota 55403
Dated this 25th day of August, 1989.
AMERICAN SHARECOM, INC.
By: /s/ Steven C. Simon
-----------------------
Its President
By: /s/ James J. Weinert
------------------------
Its Secretary
WISCONSIN AMERICAN SHARECOM, INC.
By: /s/ Steven C. Simon
-----------------------
Its President
By: /s/ James J. Weinert
------------------------
Its Secretary
<PAGE>
<PAGE> 18
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this 25th
day of August, 1989 by Steven C. Simon and James J. Weinert, the
President and Secretary, respectively of American Sharecom, Inc., a
Minnesota corporation on behalf of the corporation.
/s/ William J. King
- -------------------
Notary Public
STATE OF MINNESOTA )
) ss
COUNTY OF HENNEPIN )
The foregoing instrument was acknowledged before me this 25th
day of August, 1989 by Steven C. Simon and James J. Weinert, the
President and Secretary, respectively of Wisconsin American
Sharecom, Inc., a Wisconsin corporation on behalf of the
corporation.
/s/ William J. King
- -------------------
Notary Public
<PAGE>
<PAGE> 19
ARTICLES OF MERGER
In accordance with Minnesota Statute Section 302A.615, the
undersigned officers .of AMERICAN SHARECOM, INC., a Minnesota
corporation (the "Company") and SHARECOM HOLDINGS, INC., a
Minnesota corporation ("Holdings") do hereby make and execute these
Articles of Merger, as follows:
ARTICLE I
Constituent Corporations and Surviving Corporation
The name of each Constituent Corporation to the Merger (the
"Merger") is American Sharecom, Inc. and Sharecom Holdings, Inc.
The Surviving Corporation is American Sharecom, Inc.
ARTICLE II
Approval of Merger
The Agreement and Plan of Merger between the parties dated
April 8, 1992, has been approved by the shareholders of Holdings
and the Company in the manner provided in Minn. Stat. Section
302A.613.
ARTICLE III
Effective Date
The Merger shall be effective upon the date on which these
Articles of Merger are filed in the office of the secretary of
state of Minnesota pursuant to the Minnesota Business Corporation
Act. Such date is referred to herein as the "Effective Date."
ARTICLE IV
Effect of Merger
(a) At the Effective Date, Holdings shall be merged into the
Company and the separate existence of Holdings shall thereupon
cease. The Company (the "Surviving Corporation") shall possess all
the rights, privileges, immunities, powers and purposes of each of
the Constituent Corporations. All the property, real, personal and
mixed, tangible and intangible, of the Constituent Corporations,
<PAGE>
<PAGE> 20
and all debts due on whatever account by them, including choses in
action belonging to them, all as the same shall exist and to the
extent of their right, title and interest therein, on the Effective
Date, shall vest in the Company, without further act or demand; and
all such rights, privileges, immunities, powers and purposes and
all and every other interest of the Constituent Corporation shall
be thereafter the property of the Company. The Company shall be
responsible for all the liabilities and obligations of the
Constituent Corporations.
(b) The Articles of Incorporation of the Company shall be the
Articles of Incorporation of the Surviving Corporation.
(c) The Bylaws of the Company shall be the Bylaws of the
Surviving Corporation.
ARTICLE V
Manner and Basis of Converting Shares
The manner and basis of exchanging the securities of the
Constituent Corporations into cash of the Surviving Corporation is
as follows:
(a) On the Effective Date, each issued and outstanding
share of common stock of Holdings shall be converted into and
exchanged for one share of common stock of the Company;
(b) on the Effective Date, the common stock of the
Company owned by Holdings shall be surrendered and canceled;
(c) On the Effective Date, each outstanding share of
common stock of the Company (other than common stock of the Company
owned by Holdings) shall, without further action on the part of the
holders thereof, be canceled and converted into the right to
receive $17,695 in cash. All such Shares, by virtue of the Merger
and without any action on the part of the holder thereof, shall no
longer be outstanding and shall be canceled and retired and shall
cease to exist, and each holder of a certificate representing any
such Shares shall thereafter cease to have any rights with respect
to such shares.
<PAGE>
<PAGE> 21
The provisions of this Article V shall not apply to any
objecting shareholder of Holdings or the Company who shall file a
written objection under Section 302A.471 of the Minnesota Business
Corporation Act and perfect his or her rights thereunder, it being
intended that any such objecting shareholder shall have in
consideration for the shares of common stock or Company common
stock so held only the rights under Section 302A.471 to be paid the
fair value .of his or her shares of common stock and other rights
given under Section 302A.471, in the manner and subject to the
procedures and conditions herein provided for.
ARTICLE VI
Fractional Interests and Surrender of Shares
No fractional interests in Company common stock will be issued
under the Merger. Any holder of Holdings common stock who otherwise
would be entitled to a fractional interest of Company common stock
shall be paid in cash for such fractional share at a rate of
$17,695 per full share of Company common stock.
On and immediately after the Effective Date, each holder of
record of any certificate or certificates representing shares of
Holdings common stock shall surrender such certificate or
certificates to the company duly endorsed for transfer and upon
such surrender will receive Company common stock representing the
amounts to which such holder is entitled as determined in
accordance with Article V(a).
On and immediately after the Effective Date, each holder of
record of any certificate or certificates of Company common stock,
other than Holdings, shall surrender such certificate or
certificates to the Company, duly endorsed for transfer and upon
such surrender will receive the amounts of cash to which the holder
is entitled to receive in accordance with Article V(c).
<PAGE>
<PAGE> 22
ARTICLE VII
Directors of Surviving Corporation
The names and respective mailing addresses of the directors of
the Company who shall hold office from and after the Effective Date
until the first annual meeting of shareholders of the Company
thereafter, and until their successors be elected and qualified,
are as follows:
Steven C. Simon James J. Weinert
1300 Nicollet Mall 1300 Nicollet Mall
Suite 218 Suite 218
Minneapolis, Minnesota 55403 Minneapolis, Minnesota 55403
ARTICLE VIII
Compliance with Laws
All provisions of the laws of the State of Minnesota
applicable to the Merger have been complied with.
IN WITNESS WHEREOF, each of the Constituent Corporations has
caused these Articles of Merger to be signed by its officers
thereunto duly authorized, this day of , 1992.
AMERICAN SHARECOM, INC.
By: /s/S. C. Simon
-----------------------
Its President
By: /s/James J. Weinert
------------------------
Its Secretary
SHARECOM HOLDINGS, INC.
By: /s/S. C. Simon
-----------------------
Its President
By: /s/James J. Weinert
------------------------
Its Secretary
<PAGE>
<PAGE> 23
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing was acknowledged before me this 8th day of May,
1992, by Steven C. Simon and James J. Weinert, the President and
Secretary respectively, of American Sharecom, Inc., on behalf of
said corporation.
/s/ Albert A. Woodward
----------------------
Notary Public
STATE OF MINNESOTA )
) ss.
COUNTY OF HENNEPIN )
The foregoing was acknowledged before me this 8th day of May,
1992, by Steven C. Simon and James J. Weinert, the President and
Secretary respectively, of SHARECOM HOLDINGS, INC., on behalf of
said corporation.
/s/ Albert A. Woodward
----------------------
Notary Public
<PAGE>
<PAGE> 24
BYLAWS OF SHARECOM INC.
ARTICLE I
OFFICES, CORPORATE SEAL
Section 1.01. Registered Office. The registered office of the
corporation in Minnesota shall be that set forth in the Articles of
Incorporation or in the most recent amendment of the Articles of
Incorporation or resolution of the directors filed with the
Secretary of State of Minnesota changing the registered office.
Section 1.02. Other Offices. The corporation may have such
other offices, within or without the State of Minnesota, as the
directors shall, from time to time, determine.
Section 1.03. Corporate Seal. The corporate seal shall be
circular in form and shall have inscribed thereon the name of the
corporation and the word "Minnesota" and the words "Corporate
Seal".
ARTICLE II.
MEETINGS OF SHAREHOLDERS
Section 2.01. Place and Time of Meetings. Meetings of the
shareholders may be held at any place, within or without the State
of Minnesota, as may from time to time be designated by the
directors and, in the absence of such designation, shall be held at
the registered office of the corporation in the State of Minnesota.
The directors shall designate the time of day for each meeting and,
in the absence of such designation, every meeting of shareholders
shall be held at ten o'clock A.M.
Section 2.02. Annual Meetings.
(a) The annual meeting of the shareholders shall be held on
such date as the Board of Directors shall by resolution establish,
which date shall not be more than 150 days after the end of the
corporation's fiscal year.
<PAGE>
<PAGE> 25
(b) At the annual meeting the shareholders, voting as provided
in the Articles of Incorporation and these Bylaws, shall designate
the number of directors to constitute the Board of Directors
(subject to the authority of the Board of Directors thereafter to
increase the number of directors as permitted by law), shall elect
directors, and shall transact such other business as may properly
come before them.
Section 2.03. Special Meetings. Special meetings of the
shareholders may be held at any time and for any purpose and may be
called by the Chairman of the Board, the President, any two
directors, or by one or more shareholders holding 10% or more of
the shares entitled to vote on the matters to be presented to the
meeting.
Section 2.04. Quorum, Adjourned Meetings. The holders of a
majority of the shares outstanding and entitled to vote shall
constitute a quorum for the transaction of business at any annual
or special meeting. In case a quorum shall not be present at a
meeting, those present shall adjourn to such day as they shall, by
majority vote, agree upon, and a notice of such adjournment shall
be mailed to each shareholder entitled to vote at least 5 days
before such adjourned meeting. If a quorum is present, a meeting
may be adjourned from time to time without notice other than
announcement at the meeting. At adjourned meetings at which a
quorum is present, any business may be transacted which might have
been transacted at the meeting as originally noticed. If a quorum
is present, the shareholders may continue to transact business
until adjournment notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
Section 2.05. Voting. At each meeting of the shareholders
every shareholder having the right to vote shall be entitled to
vote either in person or by proxy. Each shareholder, unless the
Articles of Incorporation or statute provide otherwise, shall have
one vote for each share having voting power registered in such
shareholder's name on the books of the corporation. Upon the demand
of any shareholder, the vote upon any question before the meeting
shall be by ballot. All questions shall be decided by a majority
vote of the number of shares entitled to vote and represented at
the meeting at the time of the vote except if
<PAGE>
<PAGE> 26
otherwise required by statute, the Articles of Incorporation, or
these Bylaws.
Section 2.06. Closing of Books. The Board of Directors may fix
a time, not exceeding 60 days preceding the date of any meeting of
shareholders, as a record date for the determination of the
shareholders entitled to notice of, and to vote at, such meeting,
notwithstanding any transfer of shares on the books of the
corporation after any record date so fixed. The Board of Directors
may close the books of the corporation against the transfer of
shares during the whole or any part of such period. If the Board of
Directors fails to fix a record date for determination of the
shareholders entitled to notice of, and to vote at, any meeting of
shareholders, the record date shall be the 20th day preceding the
date of such meeting.
Section 2.07. Notice of Meetings. There shall be mailed to
each shareholder, shown by the books of the corporation to be a
holder of record of voting shares, at his address as shown by the
books of the corporation, a notice setting out the time and place
of each annual meeting and each special meeting, which notice shall
be mailed at least five 5 days prior thereto; except that notice of
a meeting at which an agreement of merger or consolidation is to be
considered shall be mailed to all shareholders of record, whether
entitled to vote or not, at least two weeks prior thereto; and
except that notice of a meeting at which a proposal to dispose of
all, or substantially all, of the property and assets of the
corporation is to be considered shall be mailed to all shareholders
of record, whether entitled to vote or not, at least 10 days prior
thereto; and except that notice of a meeting at which a proposal to
dissolve the corporation or to amend the Articles of Incorporation
is to be considered shall be mailed to all shareholders of record,
whether entitled to vote or not, at least 10 days prior thereto.
Every notice of any special meeting shall state the purpose or
purposes for which the meeting has been called, pursuant to Section
2.03, and the business transacted at all special meetings shall be
confined to the purpose stated in the call.
Section 2.08. Waiver of Notice. Notice of any annual or
special meeting may be waived by any shareholder either before at
or after such meeting in writing signed by such shareholder or a
<PAGE>
<PAGE> 27
representative entitled to vote the shares of such shareholder. A
shareholder, by his attendance at any meeting of shareholders,
shall be deemed to have waived notice of such meeting, unless the
attendance was solely for the purpose of protesting the holding of
the meeting.
Section 2.09. Written Action. Any action which might be taken
at a meeting of the shareholders may be taken without a meeting if
done in writing and signed by all of the shareholders.
ARTICLE III.
DIRECTORS
Section 3.01. General Powers. The property, affairs and
business of the corporation shall be managed by or under the
authority of the Board of Directors.
Section 3.02. Number, Qualification and Term of Office. Until
the first meeting of shareholders, the number of directors shall be
the number named in the Articles of Incorporation. Thereafter, the
number of directors shall be established by resolution of the
shareholders (subject to the authority of the Board of Directors to
increase the number of directors as permitted by law), but shall
not be less than the lesser of (i) the number of shareholders of
record and beneficially, or (ii) three. In the absence of such
shareholder resolution, the number of directors shall be the number
last fixed by the shareholders or the Board of Directors, or the
Articles of Incorporation. Directors need not be shareholders. Each
of the directors shall hold office until the annual meeting of
shareholders next held after such director's election and until
such director's successor shall have been elected and shall
qualify, or until such director shall resign, or shall have been
removed as hereinafter provided.
Section 3.03. Annual Meeting. As soon as practicable after
each annual election of directors, the Board of Directors shall
meet at the registered office of the corporation, or at such other
place within or without the State of Minnesota as may be designated
by the Board of Directors, for the purpose of electing the officers
of the corporation and for the transaction of such other business
as shall come before the meeting.
<PAGE>
<PAGE> 28
Section 3.04. Regular Meetings. Regular meetings of the Board
of Directors shall be held from time to time at such time and place
within or without the State of Minnesota as may be fixed by
resolution adopted by a majority of the whole Board of Directors.
Section 3.05. Special Meetings. Special meetings of the Board
of Directors may be called by the Chairman of the Board, the
President, or by any two of the directors and shall be held from
time to time at such time and place as may be designated in the
notice of such meeting.
Section 3.06. Notice of Meetings. No notice need be given of
any annual or regular meeting of the Board of Directors. Notice of
each special meeting of the Board of Directors shall be given by
the Secretary who shall give at least twenty-four hours' notice
thereof to each director by mail, telephone, telegram or in person.
Section 3.07. Waiver of Notice. Notice of any meeting of the
Board of Directors may be waived by any director either before, at,
or after such meeting in writing signed by each director. A
director, by his attendance at any meeting of the Board of
Directors, shall be deemed to have waived notice of such meeting,
unless such attendance was solely for the purpose of protesting the
holding of such meeting.
Section 3.08. Quorum. A majority of the whole Board of
Directors shall constitute a quorum for the transaction of business
except that when a vacancy or vacancies exist, a majority of the
remaining directors shall constitute a quorum.
Section 3.09. Conference Communications. Directors may
participate in any meeting of the Board of Directors, or of any
duly constituted committee thereof, by means of a conference
telephone conversation or other comparable communication technique
whereby all persons participating in the meeting can hear and
communicate to each other. For the purposes of establishing a
quorum and taking any action at the meeting, such directors
participating pursuant to this Section 3.09 shall be deemed present
in person at the meeting; and the place of the meeting shall be the
place or origination of the conference telephone conversation or
other comparable communication technique.
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Section 3.10. Vacancies; Newly Created Directorships.
Vacancies in the Board of Directors of this corporation occurring
by reason of death or resignation shall be filled for the unexpired
term by a majority of the remaining directors of the Board although
less than a quorum; newly created directorships resulting from an
increase in the authorized number of directors by action of the
Board of Directors as permitted by Section 3.02 may be filled by a
two-thirds vote of the directors serving at the time of such
increase; and each person so elected shall be a director until such
director's successor is elected by the shareholders, who may make
such election at their next annual meeting or at any meeting duly
called for that purpose.
Section 3.11. Removal. The entire Board of Directors or any
individual director may be removed from office, with or without
cause, by a vote of the shareholders holding a majority of the
shares entitled to vote at an election of directors except, as
otherwise provided by Section 301.29 of the Minnesota Business
Corporation Law, as amended, when the shareholders have the right
to cumulate their votes. In the event that the entire Board or any
one or more directors be so removed, new directors shall be elected
at the same meeting.
Section 3.12. Executive Committee. The Board of Directors, by
unanimous affirmative action of the entire Board, may establish an
Executive Committee consisting of two or more directors which, to
the extent determined by unanimous affirmative action of the entire
board, shall have and exercise the authority of the board in the
management of the business of the corporation. Any such Executive
Committee may, if desired, elect a chairman of such Committee,
shall act only in the interval between meetings of the board and
shall at all times be subject to the control and direction of the
board. Vacancies in the membership of the Committee shall be filled
by the Board of Directors.
Section 3.13. Other Committees. The Board of Directors may
establish other committees from time to time making such
regulations, as it deems advisable, with respect to the membership,
authority and procedures of such committees.
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Section 3.14. Written Action. Any action which might be taken
at a meeting of the Board of Directors, or any duly constituted
committee thereof, may be taken without a meeting if done in
writing and signed by all of the directors or committee members.
Section 3.15. Compensation. Directors who are not salaried
officers of this corporation shall receive such fixed sum per
meeting attended or such fixed annual sum as shall be determined,
from time to time, by resolution of the Board of Directors. The
Board of Directors may, by resolution, provide that all directors
shall receive their expenses, if any, of attendance at meetings of
the Board of Directors or any committee thereof. Nothing herein
contained shall be construed to preclude any director from serving
this corporation in any other capacity and receiving proper
compensation therefor.
ARTICLE IV.
OFFICERS
Section 4.01. Number. The officers of the corporation shall
consist of a Chairman of the Board (if one is elected by the
Board), the President, one or more Vice Presidents (if desired by
the Board), a Secretary, a Treasurer and such other officers and
agents as may, from time to time, be elected by the Board of
Directors. Any two offices, except those of President and Vice
President, may be held by one person.
Section 4.02. Election, Term of Office and Qualifications. At
each annual meeting of the Board of Directors the Board shall
elect, from within or without their number, the President, the
Secretary, the Treasurer and such other officers as may be deemed
advisable. Such officers shall hold office until the next annual
meeting of the directors or until their successors are elected and
qualify. The President and all other officers who may be directors
shall continue to hold office until the election and qualification
of their successors, notwithstanding an earlier termination of
their directorship.
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<PAGE> 31
Section 4.03. Removal and Vacancies. Any officer may be
removed from his office by the Board of Directors, with or without
cause. Such removal, however, shall be without prejudice to the
contract rights of the person so removed. If there be a vacancy
among the officers of the corporation by reason of death,
resignation or otherwise, such vacancy shall be filled for the
unexpired term by the Board of Directors.
Section 4.04. Chairman of the Board. The Chairman of the
Board, if one is elected, shall preside at all meetings of the
shareholders and directors and shall have such other duties as may
be prescribed, from time to time, by the Board of Directors.
Section 4.05. President. The President shall have general
active management of the business of the corporation. In the
absence of the Chairman of the Board, he shall preside at all
meetings of the shareholders and directors. He shall be the chief
executive officer of the corporation and shall see that all orders
and resolutions of the Board of Directors are carried into effect.
He may execute and deliver, in the name of the corporation, any
deeds, mortgages, bonds, contracts or other instruments pertaining
to the business of the corporation and, in general, shall perform
all duties usually incident to the office of the President. He
shall have such other duties as may, from time to time, be
prescribed by the Board of Directors.
Section 4.06. Vice President. Each Vice President shall have
such powers and shall perform such duties as may be specified in
the Bylaws or prescribed by the Board of Directors or by the
President. In the event of the absence or disability of the
President, Vice Presidents shall succeed to his power and duties in
the order designated by the Board of Directors.
Section 4.07. Secretary. The Secretary shall be secretary of
and shall attend all meetings of the shareholders and Board of
Directors and shall record all proceedings of such meetings in the
minute book of the corporation. He shall give proper notice of
meetings of shareholders and directors. He shall keep the seal of
the corporation, if any, and shall affix the same to any instrument
requiring it and may, when necessary, attest the seal by his
signature. He shall perform such other duties as may, from
<PAGE>
<PAGE> 32
time to time, be prescribed by the Board of Directors or by the
President.
Section 4.08. Treasurer. The Treasurer shall keep accurate
accounts of all moneys of the corporation received or disbursed. He
shall deposit all moneys, drafts and checks in the name of, and to
the credit of, the corporation in such banks and depositaries as
Board of Directors shall, from time to time, designate. He shall
have power to endorse, for deposit, all notes, checks and drafts
received by the corporation. He shall disburse the funds of the
corporation, as ordered by the Board of Directors, making proper
vouchers therefor. He shall render to the President and the
directors, whenever required, an account of all his transactions as
Treasurer and of the financial condition of the corporation, and
shall perform such other duties as may, from time to time, be
prescribed by the Board of Directors or by the President.
Section 4.09. Compensation. The officers of this corporation
shall receive such compensation for their services as may be
determined, from time to time, by resolution of the Board of
Directors.
ARTICLE V.
SHARES AND THEIR TRANSFER
Section 5.01. Certificates for Shares. Every owner of shares
of the corporation shall be entitled to a certificate, to be in
such form as shall be prescribed by the Board of Directors,
certifying the number of shares of the corporation owned by such
shareholder. The certificates for such shares shall be numbered in
the order in which they shall be issued and shall be signed, in the
number of the corporation, by the President or a Vice President and
by the Secretary or an Assistant Secretary or by such officers as
the Board of Directors may designate. If the certificate is signed
by a transfer agent or registrar, such signatures of the corporate
officers may be by facsimile if authorized by the Board of
Directors. Every certificate surrendered to the corporation for
exchange or transfer shall be cancelled, and no new certificate or
certificates shall be issued in exchange for any existing
certificate until such existing certificate shall have been so
cancelled, except in cases provided for in Section 5.04.
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<PAGE> 33
Section 5.02. Issuance of Shares. The Board of Directors is
authorized to cause to be issued shares of the corporation up to
the full amount authorized by the Articles of Incorporation in such
amounts as may be determined by the Board of Directors and as may
be permitted by law. No shares shall be allotted except in
consideration of cash or other property, tangible or intangible,
received or to be received by the corporation, of services rendered
or to be rendered to the corporation, or of an amount transferred
from surplus to stated capital upon a share dividend. In the event
the consideration received is a note from the purchaser, no shares
shall be issued until the note has been paid. At the time of such
allotment of shares, the Board of Directors making such allotments
shall state, by resolution, their determination of the fair value
to the corporation in monetary terms of any consideration other
than cash for which shares are allotted. The amount of
consideration to be received in cash, or otherwise, shall not be
less than the par value of the shares so allotted.
Section 5.03. Transfer of Shares. Transfer of shares on the
books of the corporation may be authorized only by the shareholder
named in the certificate, or the shareholder's legal
representative, or the shareholder's duly authorized
attorney-in-fact, and upon surrender of the certificate or the
certificates for such shares. The corporation may treat, as the
absolute owner of shares of the corporation, the person or persons
in whose name shares are registered on the books of the
corporation.
Section 5.04. Loss of Certificates. Any shareholder claiming a
certificate for shares to be lost or destroyed shall make an
affidavit of that fact in such form as the Board of Directors shall
require and shall, if the Board of Directors so requires, give the
corporation a bond of indemnity in form, in an amount, and with one
or more sureties satisfactory to the Board of Directors, to
indemnify the corporation against any claim which may be made
against it on account of the reissue of such certificate, whereupon
a new certificate may be issued in the same tenor and for the same
number of shares as the one alleged to have been destroyed or lost.
<PAGE>
<PAGE> 34
ARTICLE VI.
DIVIDENDS, SURPLUS, ETC.
Section 6.01. Dividends. Subject to the provisions of the
Articles of Incorporation, of these Bylaws, and of law, the Board
of Directors may declare dividends from paid-in surplus, earned
surplus, or from net earnings for the current or preceding fiscal
year of the corporation whenever, and in such amounts as, in its
opinion, are deemed advisable.
Section 6.02. Use of Surplus, Reserve. Subject to the
provisions of the Articles of Incorporation and of these Bylaws,
the Board of Directors, in its discretion, may use, and apply, any
of the net assets or net profits of the corporation applicable for
such purpose in purchasing or acquiring any of the shares of the
corporation in accordance with law, or any of its bonds,
debentures, notes, scrip or other securities or evidences of
indebtedness, or, from time to time, may set aside from its net
assets or net profits such sum or sums as it, in its absolute
discretion, may think proper as a reserve fund for any purpose it
may think proper.
Section 6.03. Record Date. Subject to any provisions of the
Articles of Incorporation, the Board of Directors may fix a date
not exceeding 60 days preceding the date fixed for the payment of
any dividend as the record date for the determination of the
shareholders entitled to receive payment of the dividend and, in
such case, only shareholders of record on the date so fixed shall
be entitled to receive payment of such dividend notwithstanding any
transfer of shares on the books of the corporation after the record
date. The Board of Directors may close the books of the corporation
against the transfer of shares during the whole or any part of such
Period.
<PAGE>
<PAGE> 35
ARTICLE VII.
BOOKS OF RECORDS, AUDIT. FISCAL YEAR
Section 7.01. Books and Records. The Board of Directors of the
corporation shall cause to be kept:
(1) a share register, giving the names and addresses of the
shareholders, the number and classes held by each, and the dates on
which the certificates therefor were issued;
(2) records of all proceedings of shareholders and directors;
and
(3) such other records and books of account as shall be
necessary and appropriate to the conduct of the corporate business.
Section 7.02. Documents Kept at Registered Office. The Board
of Directors shall cause to be kept at the registered office of the
corporation originals or copies of:
(1) records of all proceedings of shareholders and directors;
(2) Bylaws of the corporation and all amendments thereto: and
(3) reports made to any or all of the shareholders within the
next preceding three (3) years.
Section 7.03. Fiscal Year. The fiscal year of the corporation
shall be determined by the Board of Directors.
ARTICLE VIII.
INSPECTION OF BOOKS
Section 8.01. Examination by Shareholders. Every shareholder
of the corporation and every holder of a voting trust certificate
shall have a right to examine, in person or by agent or attorney,
at any reasonable time or times, for any proper purpose, and at the
place or places where usually kept, the share register, books of
account and records of the proceedings of the shareholders and
directors and to make extracts therefrom.
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<PAGE> 36
Section 8.02. Information to Shareholders. Upon request by a
shareholder of the corporation, the Board of Directors shall
furnish to him a statement of profit and loss for the last fiscal
year and a balance sheet containing a summary of the assets and
liabilities as of the close of such fiscal year.
ARTICLE IX.
LOANS TO OFFICERS, DIRECTORS SHAREHOLDERS
Section 9.01. Loans to Shareholders. The corporation shall not
lend any of its assets to shareholders upon the security of its
shares. If any such loan be made, the officers and directors who
make such loan, or assent thereto, shall be jointly and severally
liable for repayment or return thereof.
Section 9.02. Loans to Officers and Directors. The corporation
may lend money to, or guarantee an obligation of, or otherwise
assist an officer or other employee of the corporation or of a
subsidiary of the corporation, including an officer or employee who
is a director of the corporation or of the subsidiary, whenever, in
the judgment of a majority of the directors, the loan, guaranty, or
assistance may reasonably be expected to benefit the corporation
and is approved by the majority of the directors. The loan,
guarantee, or other assistance may be with or without interest, and
may be unsecured, or may be secured in the manner as a majority of
the directors approve, including, without limitation, a pledge of
or other security interest in shares of the corporation. Nothing in
this section shall be deemed to deny, limit, or restrict the powers
of guaranty or warranty of the corporation at common law or under a
statute of the State of Minnesota.
ARTICLE X.
INDEMNIFICATION OF CERTAIN PERSONS
Section 10.01. The corporation shall indemnify such persons,
for such expenses and liabilities, in such manner, under such
circumstances, and to such extent as permitted by Section 301.095
of the Minnesota Statutes, as now enacted or hereafter amended.
<PAGE>
<PAGE> 37
ARTICLE XI.
AMENDMENTS
Section 11.01. These Bylaws may be amended or altered by a
vote of the majority of the whole Board of Directors at any meeting
provided that notice of such proposed amendment shall have been
given in the notice given to the directors of such meeting. Such
authority in the Board of Directors is subject to the power of the
shareholders to change or repeal such Bylaws by a majority vote of
the shareholders present or represented at any annual or special
meeting of shareholders called for such purpose, and the Board of
Directors shall not make or alter any Bylaws fixing their
qualifications, classifications, term of office, or number, except
that the Board of Directors may make or alter any Bylaw to increase
their number.
ARTICLE XII.
SECURITIES OF OTHER CORPORATIONS
Section 12.01. Voting Securities Held by the Corporation.
Unless otherwise ordered by the Board of Directors, the President
shall have full power and authority on behalf of the corporation
(a) to attend any meeting of security holders of other corporations
in which the corporation may hold securities and to vote such
securities on behalf of this corporation; (b) to execute any proxy
for such meeting on behalf of the corporation; or (c) to execute a
written action in lieu of a meeting of such other corporation on
behalf of this corporation. At such meeting, the President shall
possess and may exercise any and all rights and powers incident to
the ownership of such securities that the corporation possesses.
The Board of Directors may, from time to time, grant such power and
authority to one or more other persons and may remove such power
and authority from the President upon any other person or persons.
<PAGE>
<PAGE> 38
Section 12.02. Purchase and Sale of Securities. Unless
otherwise ordered by the Board of Directors, the President shall
have full power and authority on behalf of the corporation to
purchase, sell, transfer or encumber any and all securities of any
other corporation owned by the corporation, and may execute and
deliver such documents as may be necessary to effectuate such
purchase, sale, transfer or encumbrance. The Board of Directors
may, from time to time, confer like powers upon any other person or
persons.
ARTICLE XIII.
RESTRICTIONS UPON TRANSFER OF SHARES
Section 13.01. Each holder of a common share or shares
(hereinafter referred to as "shares") of the corporation, upon
acquiring the same in any manner, thereby and hereby gives and
grants, upon the terms and conditions herein state, to the
corporation and to its shareholders an irrevocable right and option
to purchase the share or shares so acquired by such holder.
Section 13.02. Such irrevocable right and option shall be
exercisable as hereinafter provided upon the occurrence of any one
or more of the following events (hereinafter referred to as
"Purchase Events"):
A. the death of any shareholder, except as provided below
B. the appointment by a court of competent jurisdiction or
otherwise of a receiver, a trustee, or assignee of any shareholder
of his property;
C. the voluntary application of any shareholder for relief
under any act of congress or any of the laws of the several states,
now or hereafter enacted, providing for the relief of debtors;
D. the expiration of thirty (30) days immediately following
the date upon which a judgment entered in a court of record against
any shareholder becomes final, provided such judgment remains
unsatisfied;
E. the institution of a levy, garnishment or attachment
involving the shares of any shareholder;
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<PAGE> 39
F. the expressed desire of any shareholder to sell, assign,
pledge, transfer, or otherwise dispose of or encumber any share or
shares of the corporation owned by him.
Any shareholder may, notwithstanding the provisions of Section
13.02, transfer or dispose of his shares by testamentary
disposition, or by virtue of the laws of descent in case of
intestacy to his or her spouse, or to a trustee for the benefit of
his or her spouse, without giving rise to the foregoing purchase
option; but the shares so transferred shall continue, in the hands
of such beneficiary or distributee, to be subject to the provisions
of this Article XIII as to any supervening transaction, with the
same effect as if such shares were still owned and held by the
decedent. However, if by bequest or distribution, any shares pass
or are ordered or decreed by any Court of Probate jurisdiction to
anyone except the shareholder's spouse, the corporation and its
shareholders shall have the right and option to purchase the same
for a sum equal to the value of such shares as calculated according
to Section 13.03 (F).
Section 13.03. Such irrevocable right and option shall be
exercisable upon the occurrence of any one or more Purchase Events
in the following manner and upon the following terms (provided that
nothing herein shall prohibit the exercise of this option where a
Purchase Event has occurred but no notice of a Purchase Event has
been served as provided below):
A. Upon the happening of any Purchase Event and before any
sale, assignment, pledge, transfer or other disposition or
encumbrance of any share or shares of the corporation may be made,
written notice of the occurrence of said Purchase Event shall be
given by or on behalf of the holder or holders of said share or
shares by registered mail to the corporation at its then principal
place of business, which notice shall specify the number of shares
affected by the Purchase Event, the certificate or certificates
evidencing the same and the Purchase Event.
B. The corporation shall have, within the thirty (30) days
next following the receipt by it of such notice of Purchase Event
(hereinafter referred to as the "First Purchase Period"), an option
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<PAGE> 40
to purchase all or any part of the share or shares referred to in
said notice from the holder or holders thereof at the price per
share and upon the terms hereinafter stated.
C. If the corporation fails to exercise its Option with
respect to any or all of the shares referred to in said notice of
Purchase Event, each of the shareholders of the corporation, except
the shareholder giving said notice, shall have the option to
purchase, at the price per share and upon the terms and conditions
hereinafter stated, his pro rata share of the shares specified in
said notice which the corporation does not purchase (calculated to
the nearest full share), which option shall continue for a period
of thirty (30) days next following the expiration of the First
Purchase Period (hereinafter referred to as the "Second Purchase
Period"). The Board of Directors shall calculate the number of
shares (to the nearest full share) which each of the shareholders
shall be entitled to purchase and the purchase price per share as
hereinafter determined, and shall give written notice on or before
the expiration of said First Purchase Period to each of the
shareholders of the corporation at his address, as the same then
appears on the books and records of the corporation, setting forth:
(a) that a notice of Purchase Event has been received from a
shareholder, naming him; (b) the number of shares referred to in
such notice of Purchase Event; (c) the number of shares, if any, to
be purchased by the corporation from said shareholder as a result
of such notice of Purchase Event; (d) the number of shares which
each shareholder shall be entitled to purchase pursuant to this
option; (e) the purchase price per share; and (f) the date on which
the option to purchase such shares must be exercised, which date
shall be five (5) days prior to the expiration of said Second
Purchase Period. On or before the date specified in such notice to
shareholders as the expiration date for the exercise of their
option to purchase such shares, each shareholder desiring to
purchase any such shares, shall give written notice thereof by
registered mail to the corporation at its then principal place of
business specifying the number of shares which the shareholder is
willing to purchase, which number may be the same as or more or
less than the number of shares which is offered to such shareholder
pursuant to said notice. The difference between the number of
shares offered each shareholder and the number which he has given
<PAGE>
<PAGE> 41
notice that he desires to purchase shall be referred to as
"under-subscribed shares" or "over-subscribed shares" as the case
may be. Under-subscribed shares shall be allotted among those
shareholders who give notice of a desire to purchase
over-subscribed shares in an amount equal to the proportion which
the over-subscription of each over-subscribing shareholders bears
to the total subscriptions.
D. Not less than five (5) days prior to the expiration of said
Second Purchase Period, each shareholder who desires to exercise
this option shall deliver to the corporation the purchase price,
determined as hereinafter provided with respect to the share or
shares allotted to him pursuant to this option. The sum so received
shall be held by the corporation in trust to be paid to the
shareholder giving such notice of Purchase Event, or his legal
representative, upon receipt of a certificate or certificates, duly
endorsed in blank and with signature duly guaranteed.
E. On or before the date for exercise of this option, the
corporation shall notify the shareholder or person who gave such
notice of Purchase Event at his address, as the same then appears
upon the books and records of the corporation, that this option has
been exercised, and the name and address of the person or persons
exercising the same. Within twenty-four (24) hours of the receipt
thereof, the holder of said shares of his legal representative
shall deliver the certificate or certificates evidencing the same
to the corporation at its then principal place of business, duly
endorsed in blank and with signature duly guaranteed, upon delivery
to said holder or his legal representative of the purchase price,
determined as hereinafter provided, for the shares so delivered.
F. The amount to be paid per share for any and all shares
purchased pursuant to this option, shall be the book value per
share, at the close of the most recent month preceding the
occurrence of the Purchase Event, as determined by any independent
certified public accountant, who may be the one regularly examines
the financial statements of the corporation, selected by the Board
of Directors; provided, however, that if the corporation shall have
had made by an independent appraiser selected by the accountant an
appraisal of any of its physical assets and such appraisal shall
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<PAGE> 42
have been accepted by the Board of Directors of the corporation as
fairly representing the value of such assets, the value of the
physical assets covered by such appraisal shall be not the book
value thereof but rather the value thereof set forth in such
appraisal.
G. The purchase price shall be paid by each purchaser making a
down payment of one-fifth (l/5th) of that portion of the purchase
price for which he is responsible and by giving a note for the
balance payable to the seller in four (4) equal annual installments
without interest, the first of which shall be due one (1) year
after the down payment was made.
H. Nothing contained herein shall be construed to obligate
this corporation to pay to the shareholder giving such notice of
Purchase Event, or any one claiming under or through him, any part
of the purchase price payable by a shareholder exercising this
option except to the extent that the same is received from such a
shareholder.
I. In the event the corporation and the shareholders of the
corporation do not purchase all of the shares covered by a notice
of Purchase Event, the person giving the same may sell, assign,
transfer, pledge, or otherwise dispose of the balance of such
shares, free and clear of the terms and conditions hereof at any
time within sixty (60) days following the expiration of the Second
Purchase Period, but each person acquiring any of such shares shall
acquire the same subject to all the terms and conditions of this
Article XII. After the expiration of such sixty (60) day period,
any shares not disposed of by the person giving such notice of
Purchase Event shall again become subject to all the terms and
conditions of this Article XIII.
Section 13.04. No sale, assignment, pledge, ~transfer, or
other disposition or encumbrance of any shares of the corporation,
whether voluntary or involuntary, by operation of law or otherwise,
shall be valid for any purpose whatsoever without first complying
with the terms and conditions of this Bylaw, and any attempt
thereat shall be null and void. Any and all claims, liens or
interests, now or hereafter secured or imposed by legal action or
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<PAGE> 43
otherwise, in, to, or upon the shares of the corporation by any
creditor or creditors of the holder thereof shall be subject to and
limited by all of the terms and conditions hereof.
Section 13.05. Each certificate representing a share or shares
of the corporation shall contain on the face thereof the following
notice:
"Any sale, assignment, transfer, pledge, or other disposition
of the shares evidenced by this certificate, whether voluntary or
involuntary, is subject to restrictions by virtue of any option to
purchase said shares vested in the corporation and in the holders
of its shares, all as set forth in the Bylaws of the corporation
and to all of which the holder by acceptance hereof assents."
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SCHEDULE 3.2
- ------------
Correct description of Ownership of ASI Stock as shown on ASI's
Books and Records at September 30, 1994:
Cert # Date of Issuance Shares
------ ---------------- ------
Steven C. Simon 1037 5-8-92 60,000
James J. Weinert 1038 5-8-92 40,000
<PAGE>
<PAGE> 45
SCHEDULE 3.7
- ------------
(1) The unaudited financial statements for the period ended
September 30, 1994 include a balance sheet and an income statement,
but not a statement of cashflow or a statement of changes in
shareholders' equity.
(2) Former holders of 57 shares of the ASI Common Stock exercised
their right under Minnesota law to challenge the amount they
received for their shares. On June 28, 1994, Hennepin County
District Court, in the State of Minnesota, awarded the former
holders an additional $4.6 million, plus interest and legal fees.
The Company will appeal the decision.
Legal fees invoiced to the Company by its own attorneys have been
expensed. However, the amount of the June 28, 1994 award has not
been reflected in the Company's 9/30/94 financial statements.
(3) On October 4, 1994, the Company received notice from the State
of Montana that they intended to conduct a field audit related to
the Montana Telephone Tax on intrastate revenue for the period from
1984 through the 2nd quarter of 1992. The tax has varied from
1.75% to 1.8% for the years under examination. The Company has not
filed Montana Telephone Tax returns for periods prior to 1992. No
provision for any assessment that may result from this audit has
been made in the Company's 9/30/94 financial statements.
(4) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.
(5) On August 13, 1993 the Company purchased assets and entered
into non-compete agreements with Execuline of the Northwest, Inc.
and Northwest Network Communications, Inc., resellers
of long distance telephone services. Consistent with prior
acquisitions, the company has amortized the cost of the acquisition
over a three year period using the straight-line method. In
April 1994, the Company hired Ernst & Young to perform a valuation
and lifing analysis on the two acquisitions. The results of Ernst
& Young's analysis indicate that the Company has overstated the
amortization of the intangible assets by approximately $480,000
since the acquisition. This overstatement has not been revised in
the Company's 9/30/94 financial statements.
<PAGE>
<PAGE> 46
(6) In August 1994, the California State Board of Equalization
performed an audit of the Emergency Telephone Users Surcharge from
July 1, 1991, through March 31, 1994. The Company received a
preliminary indication in September 1994 that the Company would be
assessed an additional $42,882 in surcharges, interest and
penalties as a result of this audit. No provision for this
situation has been made in the Company's 9/30/94 financial
statements.
(7) Access costs for traffic originating on F.G. A, B or 800 lines
are reflected in the Company's financial statements in accordance
with its self-reported PIUs, which may differ from the
automatically-computed PIUs that would have been used if that
traffic had originated on F.G. D lines.
(8) The Company's financial statements do not reflect any charges
associated with the Lifeline Assistance and Universal Service Fund;
the Telecommunications Relay Services Fund; or FCC Common Carrier
Regulatory Fees.
(9) In fiscal 1993, the Company recorded a $373,000 liability in
connection with an adverse Hennepin County District Court decision
in "Vern Beck v. American Sharecom, Inc." In March, 1994, the
Minnesota State Court of Appeals reversed the lower court's
decision and in June, 1994, the Minnesota State Supreme Court
refused to review the decision of the Appellate Court. However,
the $373,000 liability is still reflected in the Company's 9/30/94
financial statements.
<PAGE>
<PAGE> 47
SCHEDULE 3.8
- ------------
(1) The Company entered into the following equipment and network
agreements in September 1994:
(a) A $220,000 purchase order for two DTF frames and four
shelves, to be used in the Company's Seattle and Milwaukee DEX 400
switches.
(b) A $60,000 purchase order for additional T-1 cards for the
Company's Los Angeles Stromberg-Carlson switch.
(c) A two-year lease of a DS-3 between Portland, OR and
Seattle, WA, at a cost of $6,600 per month.
(d) A two-year lease of a DS-3 between Eau Claire, WI and
Milwaukee, WI, at a cost of $8,000 per month.
(2) On September 22, 1994, U.S. Long Distance announced that it
signed a letter of intent to acquire LD Network, Inc., a reseller
of the Company's Execuline long distance services. It is
anticipated that LD Network's traffic will be moved to U.S. Long
Distance's network.
(3) On September 30, 1994, the outstanding account balance of
Telecommunication Inc. (TCI), a reseller of the Company's Execuline
long distance services, was converted into a Promissory Note of
$231,066.39. The note is secured by a personal guarantee from
TCI's majority stockholder, and a security interest in all of TCI's
furniture, fixtures and equipment and account receivable balances
from Pac Bell. The note provides for monthly payment terms,
resulting in repayment in full by June 30, 1995. TCI has also
agreed to prepay for future usage.
(4) In October 1994, the Company learned that Pat Martin, an agent
for the Company's Execuline division, was attempting to transfer
certain of the Company's customers to Uninet, a competitor of the
Company. This attempted transfer is being vigorously opposed.
(5) On October 31, 1994, the Company and Call Savers of Fresno (a
reseller of the Company's Execuline long distance services) agreed
in principal to convert Call Savers outstanding account balance
with the Company into a Promissory Note of $200,000. The note will
<PAGE>
<PAGE> 48
be secured by a security interest in Call Savers customer base, and
will provide for monthly payment terms, resulting in repayment in
full by November 30, 1995. Call Savers has also agreed to prepay
for future usage.
(6) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.
(7) US West has filed intrastate access rate changes in Washington
and Oregon; both proposals suggest an effective date in January
1995. The US West proposals estimate an industry-average rate
decrease of 14% in Oregon, and a 4% increase in Washington.
(8) ASI has held preliminary discussions concerning the possible
acquisition of several long distance telephone companies.
<PAGE>
<PAGE> 49
SCHEDULE 3.9
- ------------
LITIGATION, CLAIMS
------------------
Subject Status Summary/Background
- ---------------------- -------- ---------------------------
American Sharecom v. On appeal A valuation proceeding arising
LDB International Corp., out of the buyout of all
Humbird Securities Company, shareholders in May, 1992.
Northern Securities Company
and Washington Sharecom, Inc.
LDB International Corp., Served but Action by four former share-
Humbird Securities not filed holders challenging a two year
Company, Northern Securi- old executive compensation
ties Company and Washing- decision and the extinction of
ton Sharecom, Inc. v. management options.
American Sharecom, Inc.,
Steven C. Simon, James A.
Weinert, William J. King,
William Thomas, John Fauth
Baillon/Humbird Securi- Threatened Threatened class action suit
ties v. American litigation related to the 1989 stock
Sharecom redemption.
Com System v. American Settled Petitioner was not paid for
National Telcom and services provided to American
American Sharecom, Inc. National Telcom (ANT) Inc.
American Sharecom was also
named in the claim since it
acquired the assets of ANT.
ASI filed a cross complaint
against ANT.
American National Settled Petitioner requested payment
Telcom v. American for services provided during
Sharecom, Inc. conversion of customer base to
ASI. ASI withheld payment
until Com System v. American
National Telcom, and American
Sharecom, Inc., was resolved.
<PAGE>
<PAGE> 50
LITIGATION, CLAIMS (cont'd.)
---------------------------
Subject Status Summary/Background
- ---------------------- -------- ---------------------------
Vernon R. Beck v. Dismissed Vern Beck asserted a claim
American Sharecom, Inc. on appeal that ASI wrongfully trans-
and Harry A. Johnson ferred 50,000 shares of ASI
common stock to which he
claimed an interest in
connection with the company's
redemption of all of the
common stock owned by Harry A.
Johnson in December, 1987.
Melissa Veeser v. Mark Joint law- Veeser filed a claim that she
Feil and American suit that was sexually harassed by the
Sharecom, Inc. and was sales manager and Schoolcraft
Sue Schoolcraft v. settled filed a claim for wrongful
American Sharecom, Inc. termination.
Brad Schaffer v. Settled Petitioner filed a claim for
American Sharecom, Inc. wrongful termination of
and James A. Weinert employment.
GTE v. West Coast Tele- Complaint GTE is suing both West Coast
communication, Inc. and pending and ASI for collection of past
Execuline of Sacramento due balances. ASI was erron-
eously billed for traffic that
belonged to West Coast Tele-
communication.
Driscall v. Execuline Complaint Petitioner has filed a class
of Sacramento pending action suit for improper
billing procedures.
Vortel v. Execuline Dismissed Petitioner claims there were
of Sacramento errors in the Execuline
billing system and ASI illeg-
ally took over their customer
base.
<PAGE>
<PAGE> 51
LITIGATION, CLAIMS (cont'd.)
----------------------------
Subject Status Summary/Background
- ---------------------- -------- ---------------------------
Westcom v. Execuline Judgment Petitioner was awarded damages
of Sacramento reduced for billing errors that
occurred prior to ASI
purchasing Execuline of
Sacramento.
American Sharecom v. Pending The Wisconsin Dept. of Revenue
Wisconsin Dept. of assessed ASI for unpaid Tele-
Revenue phone Gross Revenue License
Fees. The unpaid fees related
to the Datanet (Wisconsin Div.
of American Sharecom) opera-
tions prior to the ASI acqui-
sition of Datanet. As part of
the purchase agreement, the
former owners agreed to
indemnify ASI for all pre-
acquisitions activity. ASI
has collateral in the form of
a Letter of Credit from the
former owners of Datanet.
David Moore/Sacramento Dispute David Moore previously ran
Long Distance/Portland Sacramento and Portland Long
Long Distance/Seattle Distance and the companies
Long Distance were in significant financial
trouble. ASI agreed to pur-
chase the customer base of
these companies and reduce the
outstanding balance owed to
ASI. David Moore has quest-
ioned the final valuation of
the customer base and the
remaining balance owed to ASI.
<PAGE>
<PAGE> 52
LITIGATION, CLAIMS (cont'd.)
----------------------------
Subject Status Summary/Background
- ---------------------- -------- ---------------------------
Westcom v. Execuline of PUC Petitioner has filed a
Sacramento complaint complaint with the CA PUC
against Execuline, Pac West
Telcom and Call America
Business Communications Corp-
oration claiming that they
received preferential treat-
ment from Pac Bell since they
were permitted to use business
lines for originating access
following decisions of the
state and federal regulatory
bodies precluding that
practice.
<PAGE>
<PAGE> 53
LITIGATION, CLAIMS (cont'd)
--------------------------
Workers Compensation Claims
Person State Injury
- ------------- -------- -----------------------------
Ron Sargis California Stress causing back and
shoulder injuries.
Dennis Rogers California Back injury.
Sue Olsen California Stress causing neck injuries.
Hedie Mohn Washington Back, neck, hip and head
injuries that resulted from a
car accident while at work.
Tina White Washington Injuries that resulted from a
car accident while at work.
Troy Morrow Washington Malar fracture that resulted
from a car accident while at
work.
Randy Hayden California Shoulder strain.
Helen Kacmarynski Wisconsin Back and neck injury caused by
poor placement of telephone
and computer.
Brenda Fischer Minnesota Back injury.
<PAGE>
<PAGE> 54
SCHEDULE 3.10
- -------------
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:
Tariff Matters:
- --------------
The following tariffs have not been amended to reflect rate
changes:
FCC International Tariff
FCC Domestic Tariff
N Dak, S Dak, Illinois, Iowa, California, and Nevada
In the State of Idaho, we offer a number of products but only
twelve products are included in the current price list.
In general, special customer pricing arrangements have not been
incorporated into the State tariffs.
Governmental Laws and Regulations:
- ---------------------------------
Self reported PIU's for traffic originating on FGB or 800 circuits
may be different than the PIU's that would have been reported by a
LEC if the traffic had originated over FGD circuits.
ASI did not file local tax returns in the mid to late eighties in
the State of Washington.
ASI has neither calculated nor filed a TRS Fund Worksheet, as
described in the FCC rules re: Interstate Telecommunications Relay
Service (TRS).
ASI has neither calculated nor filed the Common Carrier Regulatory
Fee, as described in Public Law 103-66, "The Omnibus Budget
Reconciliation Act of 1993".
See Schedule 3.7.
<PAGE>
<PAGE> 55
SCHEDULE 3.11
- -------------
Copyrights, Patents, Trademarks, Trade Names, Processes, Inventions
and Formula applied for, issued to or owned by ASI:
The Company owns the following trade names:
American Sharecom, Inc.
Datanet
Execulines of Sacramento
Wylon Communications
Western Telephone and Telegraph
Northwest Network Communications
American National Telecommunications
Execuline
Call America
AA Sierra Telcom
Execulines of the Northwest
Possible infringement on our names: Product called "Datanet"
offered by another carrier.
Others granted to use our name: Agents (see Schedule 3.15)
Equinox Information Systems of Nashville, TN has been verbally
licensed to use certain software code written by them for ASI.
<PAGE>
<PAGE> 56
SCHEDULE 3.12
- -------------
INSURANCE
---------
Carrier: Northbrook Policy Number: 67-577368 June 1, 1994
AMERICAN SHARECOM, INC., et al.
1300 Nicollet Mall, #218
Minneapolis, Minnesota 55403
I. Property
A. Blanket Property (see Exhibit I-page 9)....$2,603,600.
1. Direct Physical Loss subject to policy
conditions and exclusions
2. Replacement Cost Coverage
3. Agreed Amount to expire 6/1/95
4. $1,000 Deductible per Occurrence
5. Protective Safeguards Endorsement applies
to Location #1
B. Extra Expense (see Exhibit I-page 9 for location limits)
1. Direct Physical Loss subject to policy
conditions and exclusions
2. 40/80/100
C. Blanket Accounts Receivable................$4,500,000
1. Direct Physical Loss subject to policy
conditions and exclusions
2. Transit coverage included for $1,000,000
D. Blanket Valuable Papers at 1300
Nicollet Mall location.....................$ 10,000
1. Direct Physical Loss subject to policy
conditions and exclusions
2. $1,000 Deductible
E. Tool Floater...............................$ 5,000
1. Direct Physical Loss subject to policy
conditions and exclusions
2. $250 Deductible per Occurrence
3. Replacement Cost
<PAGE>
<PAGE> 57
SCHEDULE 3.12 (cont'd.)
- -----------------------
F. Fine Arts Floater.........................$ 17,500
1. Oriental Rug
2. $1,000 Deductible per Occurrence
G. Cargo Coverage (Owned Property on Owned
Vehicles..................................$ 60,000
1. Replacement Cost
2. $500 Deductible
II. Crime
A. Blanket Employee Fidelity Bond............$ 500,000
1. $2,500 Deductible per Occurrence
2. Includes American Sharecom 401k
Savings Plan
III. Computer Coverage
A. Total Blanket Equipment Limit
(see Exhibit II-page 12)..................$8,895,656
B. Total Extra Expense Limit
(see Exhibit II-page 12)..................$1,917,098
C. Total Business Interruption Limit
(see Exhibit II-page 12).................$21,548,239
D. Coverage applying to Items A-C:
1. Direct physical loss subject to
policy conditions and exclusions
2. Replacement cost on Equipment
3. 180 day limitation on Business
Interruption (agreed amount)
4. One calendar year period of
restoration on Extra Expense
5. $5,000 Deductible per Occurrence
Equipment and Extra Expense
6. 0 day deductible on Business
Interruption
7. $1,000 Deductible on Breakdown
coverage (includes Equipment plus
Business Interruption)
8. Transit limit - $250,000
Other locations limit - $250,000
<PAGE>
<PAGE> 58
SCHEDULE 3.12 (cont'd.)
- -----------------------
IV. Comprehensive General Liability
A. General Annual Aggregate (other than
Products and Completed Operations).......$1,000,000
B. Products and Completed Operations
Annual Aggregate.........................$1,000,000
C. Personal and Advertising Injury Limit....$1,000,000
D. Each Occurrence..........................$1,000,000
E. Employee Benefits Liability..............$1,000,000
1. $1,000 Deductible per Occurrence
F. Stop Gap coverage for Wyoming, Washington
and Nevada
1. $100,000/$500,000/$100,000
G. Fellow Employee Exclusion waived
H. Subject to policy limitations and
exclusions, including, but not limited to:
1. Asbestos exclusion
2. Pollution exclusion
3. Employment-related practices exclusion
V. Automobile (/carrier - Northbrook)
(Policy #CA0510791 (CA); Policy #CA0577369 (all other states))
A. Bodily injury and property damage
combined single limit liability.....$1,000,000
B. Minnesota No Fault - Medical.............$ 20,000
- Non-Medical.........$ 20,000
C. Other States Medical Payments............statutory
D. Uninsured and Underinsured Motorist......$1,000,000
E. Comprehensive Deductible.................$ 500
F. Collision Deductible.....................$ 500
G. Non-owned and Hired Auto Liability.......$1,000,000
H. Insured Vehicles:
1. 1990 Audi Quattro V-8, #3748 (MN)
2. 1990 Plymouth Van, #7366 (WI)
3. 1991 Dodge Shadow, #1194 (WA)
4. 1992 Plymouth Sundance, #0077 (MT)
5. 1990 Plymouth Sundance, #3568 (WA)
6. 1989 Chevrolet Astro Van (CA)
7. 1993 GMC Sonoma, #8197 (CA)
8. 1991 Ford Ranger, #1548 (WA)
9. 1991 Ford Ranger, #1549 (WA)
10. 1992 Dodge Shadow, #3085 (WA)
<PAGE>
<PAGE> 59
SCHEDULE 3.12 (cont'd.)
- -----------------------
I. Fellow Employee Exclusion waived
J. Stacking Option applies on 1990 Audi Quattro
VI. Commercial Umbrella.........................$5,000,000
A. Subject to Audit
B. Estimated Sales: $51,476,000
VII. Workers' Compensation (Carrier - Northbrook)
A. Statutory Limits
B. Employers' Liability
1. Bodily Injury by Accident
a. $100,000 each employee
2. Bodily Injury by Disease
a. $500,000 policy limit
3. Bodily Injury by Disease
a. $100,000 each accident
C. Subject to Annual Audits
D. Estimated payroll: Sales Clerical
-------- ----------
Minnesota $340,000 $1,860,000
Wisconsin $235,000 $ 440,000
Montana $128,000 $ 447,000
Idaho $ 60,000 $ -0-
Oregon $230,000 $ 130,000
Iowa $ 15,000 $ -0-
E. Broad Form All States Endorsement
F. Experience Modification for 1994-1995
is not yet published. A tentative
modification of .76 is being used for
premium calculations.
Pricing Information
- -------------------
Package: $60,756
Auto: $10,607
Umbrella: $ 3,243
Workers Compensation: $19,130
Payment Plan
- ------------
20% deposit with 8 equal monthly installments
* $5.00 finance charge per installment, per policy
<PAGE>
<PAGE> 60
SCHEDULE 3.12 (cont'd.)
- -----------------------
Comments
- --------
Premium bearing changes during the 1993-1994 policy year:
- Add 1993 GMC Sonoma (CA)
- Add 1991 Ford Ranger (WA)
- Add 1991 Ford Ranger (WA)
- Add 1992 Dodge Shadow (WA)
- Add Oregon payroll to Workers' Compensation coverage
- Add location at Kennewick, WA
- Add location at Wenatchee, WA
- Add location at Bellingham, WA
- Add location at Redding, CA
Premium bearing changes effective June 1, 1994 renewal:
- Add Iowa payroll to Workers' Compensation coverage
- Add Nevada to "Stop Gap" Liability coverage
- Increase payrolls for all covered states per
information from Mike Ryan
- Delete property coverage for transmitting stations in
California
- Increase Business Interruption coverage for all
locations under the Computer coverage form
<PAGE>
<PAGE> 61
EXHIBIT I to SCHEDULE 3.12
- --------------------------
Business Income
Location Listing Contents and Extra Expense
- ---------------- --------- ------------------
1. 1300 Nicollet Mall $450,000 $20,000
#218, Minneapolis, MN
2. 222 North 32nd Street See computer schedule
Billings, MT
3. 2001 6th Avenue South $ 5,000 none
#2920, Seattle, WA
4. 600 Central Plaza $ 1,000 none
#306, Great Falls, MT
5. 324 Wisconsin Avenue See computer schedule
#1041, Milwaukee, WI
6. 9715 James Avenue South Accounts Receivable only
Minneapolis, MN
7. 900 Fourth Avenue $100,000 $10,000
Seattle, WA
8. 817 South 2nd Avenue See computer schedule
Minneapolis, MN
9. WTCI See computer schedule
6 South 2nd Street
Yakima, WA
10. 123 West 1st Street $ 50,000 $ 3,500
Casper, WY
11. 103 South 3rd Street $ 11,000 $ 1,000
Yakima, WA
12. 3333 North Mayfair Road $120,000 $ 5,000
#304, Milwaukee, WI
13. 1500 Casaloma Drive $ 6,000 none
Appleton, WI
14. 404 North 31st Street $ 60,000 $ 5,000
#227, Billings, MT
15. 24 South Wilson $ 1,000 none
#3, Bozeman, MT
16. 9900 Southwest Wilshire $ 30,000 $ 5,000
#200, Portland, OR
17. West 316 Boone Avenue $ 30,000 $ 5,000
#584, Spokane, WA
<PAGE>
<PAGE> 62
Business Income
Location Listing Contents and Extra Expense
- ---------------- --------- ------------------
18. 770 L Street $1,600,000 $58,825
Suite 655 and 660
Sacramento, CA
19. 1113 Williamsburg $ 25,000 $58,825
Chico, CA
20. 342 Sacramento $ 5,000 $58,825
Auburn, CA
21. 675 North 16th Street $ 25,000 $58,825
Sacramento, CA
22. 318 North Last Chance $ 30,000 $ 5,000
Gulch, Suite 20
Helena, MT
23. 416 North Higgins $ 2,000 ---
Suite 106
Messoula, MT
24. 1143 Sheridan Avenue $ 2,000 ---
Suite 7, Cody, WY
25. 1001 Mountain #2K $ 12,800 $25,000
Carson City, NV
26. 120 West First Street $ 10,000 ---
Kennewick, WA
27. 115 2nd Street $ 5,000 ---
Suite 8
Wenatchee, WA
28. 1325 Lincoln Street $ 10,000 ---
Suite 1B
Bellingham, WA
29. 2444 North Bechelli Lane $12,800 $25,000
Redding, CA
30. 624 South Grand Avenue See computer schedule
Suite 1202
Los Angeles, CA
<PAGE>
<PAGE> 63
EXHIBIT II to SCHEDULE 3.12
- ---------------------------
Location Coverage
- -------- --------
1. 1300 Nicollet Mall $ 445,656 Equipment
#218, $ 165,720 Extra Expense
Minneapolis, MN $ 12,000 Business Interruption
Breakdown coverage included
2. 222 North 32nd $ 800,000 Equipment
Room 902 $ 158,640 Extra Expense
Billings,MT $1,743,259 Business Interruption
Breakdown coverage included
3. 2001 6th Avenue South $2,000,000 Equipment
Seattle, WA $ 369,330 Extra Expense
$5,113,935 Business Interruption
Breakdown coverage included
5. 324 Wisconsin Avenue $1,900,000 Equipment
#1041 $ 318,328 Extra Expense
Milwaukee, WI $2,468,251 Business Interruption
Breakdown coverage included
8. 817 South 2nd Avenue $ -0- Equipment
Minneapolis, MN $ 124,320 Extra Expense (cont.)
$1,594,691 Business Interruption
(contingent)
Breakdown coverage included
9. WTCI $ -0- Equipment
6 South 2nd Street $ 32,160 Extra Expense (cont.)
Yakima, WA $ 515,689 Business Interruption
(contingent)
Breakdown coverage included
10. 123 West 1st Street $ -0- Equipment
Casper, WY $ -0- Extra Expense
$ 556,028 Business Interruption
Breakdown coverage included
<PAGE>
<PAGE> 64
Location Coverage
- -------- --------
18. 770 L Street $2,000,000 Equipment
Suite 655 and 660 $ 411,800 Extra Expense
Sacramento, CA $4,996,023 Business Interruption
Breakdown coverage included
34. 624 South Grand Avenue $1,750,000 Equipment
Suite 1202 $ 336,800 Extra Expense
Los Angeles, CA $4,548,363 Business Interruption
Breakdown coverage included
<PAGE>
<PAGE> 65
SCHEDULE 3.13
- -------------
INDEBTEDNESS
Norwest Bank Minnesota, National Association - $10,000,000
Revolving and Term Credit.
<PAGE>
<PAGE> 66
SCHEDULE 3.15
- -------------
LEASES
Lease Lease Current
Description Loc. Date Term Payment
- ----------- ------ ----- ----- -------
Loring Park Assoc. CORP 12/88 61 mths. $15,537.85
Hyatt 2nd,4th & 5th MPLS mth to mth
floor offices
Real estate income MILW 1/94 36 mths $4,660.15
Milwaukee office space
Meerdink & Associates MILW 2/93 7/31/95 $ 791.67
Appleton office rental
Continental Seattle Part.SEAT 6/92 5/31/97 $5,263.54
Seattle sales office rent
Hemstreet Development SEAT 11/93 11/30/95 $2,245.00
Portland office space
W&K Investments SPOK 5/91 36 mths $1,674.00
Spokane office space mth to mth
United Properties, Inc. BLGS 12/91 11/96 $2,133.52
Billings sales office space
Last Chance Properties HELA 3/93 12 mths $ 400.00
Helena office space mth to mth
600 Central Plaza HELA 4/93 5/30/94 $ 287.00
Great Falls office space
Kelley Properties HELA 3/93 12 mths $ 235.00
Missoula office space mth to mth
Meco Realty Inc. CASP 3/93 24 mths $ 442.85
Casper office space mth to mth
<PAGE>
<PAGE> 67
SCHEDULE 3.15 (cont'd.)
- -----------------------
Lease Lease
Description Loc. Date Term Payment
- ----------- ------ ----- ----- -------
Hagman/Rindahl WA 5/1/94 5/1/95 $ 300.00
Mt. Vernon, WA
Heitman Properties, Ltd CA 11/84 120 mths.$16,383.60
Heitman #2 1/1/94 3/95 $13,603.50
Heitman #3 4/89 3/95 $2,118.05
Execuline office space
Theresa Henneman CA 3/90 mth to mth$1,140.00
Execuline office space
Sierra Prof. Complex NV 11/92 12 mths. $ 992.00
WT&T office space mth to mth
A Low Cost Self Storage CA mth to mth$ 155.00
Execuline storage
General Commun. SEAT 1/92 24 mths. $2,251.75
Seattle Switch room
Granite Tower BLGS 8/91 60 mths $ 768.75
Billings switch room
Towne Realty, Inc. MILW 8/90 12/31/96 $1,957.00
Milwaukee switch room
One Wilshire LA 5/93 60 mths. $3,627.67
LA switch room
Kerley Agric. Chem. SEAT 11/93 12 mths. $2,025.00
Kennewick office space
Marguerite Hackett SEAT 3/1/92 2/28/95 $1,900.00
Yakima switch room
<PAGE>
<PAGE> 68
SCHEDULE 3.15 (cont'd.)
- -----------------------
Lease Lease
Description Loc. Date Term Payment
- ----------- ------ ----- ----- -------
Stravropoulos SEAT 4/92 12/31/94 $ 463.00
Bellingham sales office
BCD Properties CA 3/91 2/96 $1,600.00
Redding sales office
Coldwell Banker WA 6/1/94 6/1/95 $ 295.00
Wenatchee WA
Parkway Assoc. OR 4/94 4/96 $1,105.00
Eugene
Sunrise Investments WA 9/94 3/95 $1,200.00
Evertt WA office
<PAGE>
<PAGE> 69
SCHEDULE 3.15(cont'd.)
- -------------
ASI CONTRACTS
-------------
Service DS-1 Expir.
Vendor Description Type Qty Loc A Loc B Date
- -----------------------------------------------------------------------------
ACLA Local bypass DS-1 PVL Los Ang exp
ATT DS-1 PVL exp
Action Tel Traffic swap switched Los Ang exp
Bay Area Teleport DS-1 PVL Sacram Santa Rosa exp
Bay Area Teleport DS-1 PVL SanFran Santa Rosa exp
CNI Midwest traf. switched 3 Milwaukee exp
CRC/Allnet DS-1 PVL 4 Los Ang San Diego exp
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
Call America Cam uses sp telDS-1 PVL 1 SanFran Salinas exp
as underlying
carrier
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
Camnet Traffic swap switched 1 Seattle exp
Diginet/Teleport DS-3 hub DS-3 PVL 28 Chicago Chicago exp
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
Litel Crossconnects DS-1 PVL 6 Chicago Chicago exp
in Doral Plaza bldg
Means MN private DS-1 PVL 1 Minneapolis Fargo/ exp
lines Moorehead
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
<PAGE>
<PAGE> 70
SCHEDULE 3.15(cont'd.)
- ----------------------
Service DS-1 Expir.
Vendor Description Type Qty Loc A Loc B Date
- -----------------------------------------------------------------------------
Means MN private DS-1 PVL 1 Minneapolis Wadena exp
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
Metro. fiber Chicago DS-3 DS-3 PVL 28 Chicago Chicago exp
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
RCI East Coast switched 3 Milwaukee Chicago exp
switched/
operator
xxxxxxxxxxxxxxx various DS-0S DS-0 PVL 1 yr or
for data cust. less
xxxxxxxxxxxxxxx various DS-1S DS-1 PVL 1 yr or
less
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
<PAGE>
<PAGE> 71
SCHEDULE 3.15(cont'd.)
- ----------------------
Service DS-1 Expir.
Vendor Description Type Qty Loc A Loc B Date
- -----------------------------------------------------------------------------
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
TR1 Private line DS-1 PVL 3 Helena Kalispell exp
TR1 Private line DS-1 Pvl 7 Helena Great Falls exp
US Access Private lines DS-1 PVL exp
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx various DS-0S DS-0 PVL 1 yr
for data or less
Wiltel Private line DS-1 PVL 1 Los Ang San Diego exp
Wiltel Private line DS-1 PVL 1 Milwaukee DesMoines exp
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
xxxxxxxxxxxxxxx xxxxxxxxxx xxxxxxxx x xxxxxxx xxxxxxxxx xxx
<PAGE>
<PAGE> 72
SCHEDULE 3.15(cont'd.)
- ----------------------
CONTRACTS WITH CUSTOMERS
American Sharecom has entered into "Win/Win" conttractw with a
majority of its customers. These contracts provide a discount to
the customer, in exchange for their promise to stay with American
Sharecom for one, two or three years. An example of a typical
Win/Win contract is attached, although other versions have been
used.
In certain cases, American Sharecom has granted additional
discounts to customers. Some of these discounts may have been
reflected in writings to customers.
The Company has arrangements with customers on the attached
schedule.
<PAGE>
<PAGE> 73
SCHEDULE 3.15(cont'd. )
- -----------------------
RESELLER CONTRACTS*
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
* Most contracts have extended past the original "Term of
Agreement". ASI/EXL continues to provide service to these vendors
based upon the last signed agreement.
<PAGE>
<PAGE> 74
SCHEDULE 3.15(cont'd.)
- ----------------------
CONSULTING CONTRACTS
American Sharecom has an oral contract with Eric Petty relating to
his consulting business.
The Company has agency agreements with the entities or individuals
as follows:
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx
<PAGE>
<PAGE> 75
SCHEDULE 3.15(cont'd.)
- ----------------------
The Company holds Certificates of Public Convenience and Necessity
from the following states:
California
Illinois
Minnesota
Nevada
North Dakota
Oregon
South Dakota
Washington
Wisconsin
Wyoming
Certificate of Authority from the FCC.
<PAGE>
<PAGE> 76
SCHEDULE 3.16
- -------------
EMPLOYEE BENEFIT PLANS
The following is a list of Employee Benefit Plans:
(1) American Sharecom, Inc. 401(k) Savings Plan
(2) American Sharecom, Inc. Welfare Benefits Plan
In addition to these Plans, ASI has various individual bonus,
incentive and reward plans for its employees.
<PAGE>
<PAGE> 77
SCHEDULE 3.17
- -------------
ASI'S REAL PROPERTY
None
<PAGE>
<PAGE> 78
SCHEDULE 3.20
- -------------
QUALIFICATION/SUBSIDIARIES AND OTHER INTERESTS
None
<PAGE>
<PAGE> 79
SCHEDULE 3.22
- -------------
EMPLOYEES
10/31/94 Commissions,
Annual Residuals Car
Employee Name Salary & Bonus Allowance
- ------------------------------------------------------------------
Anderson, Carol J xxxxxx
Antonovich, Stacy A xxxxxx xxxxx $1,500
Arens, Treasure G xxxxxx xxxxx $ 0
Armstrong, Andrew J xxxxxx
Austin, David S xxxxxx xxxxx $ 0
Babigian, Karen xxxxxx xxxxx $ 0
Babigian, Walter xxxxxx xxxxx $ 0
Bailey, Sean G xxxxxx
Balalis, Thomas M xxxxxx xxxxx $ 0
Barney, Brian J xxxxxx xxxxx $ 0
Beattie, Kay A xxxxxx xxxxx $ 210
Beberg, Dwayne M xxxxxx
Bell, David G xxxxxx
Berry, Timm A xxxxxx xxxxx $ 0
Bezanson, Sheri L xxxxxx
Bickerstaff, Chad D xxxxxx xxxxx $4,200
Blaser, Doreen xxxxxx xxxxx $ 0
Boatwright, B.V xxxxxx xxxxx $ 0
Boe, Keith D xxxxxx xxxxx $ 0
Bondar, Trina M xxxxxx
Bowman, John xxxxxx
Boxx, Shelly L xxxxxx xxxxx $ 0
Bradley, Pamela J xxxxxx
Broome, Bryan S xxxxxx xxxxx $ 0
Brown, Michael G xxxxxx xxxxx $ 0
Bruder, Ralph M xxxxxx xxxxx $ 210
Buck, Andrew J xxxxxx
Burkholz, Paul D xxxxxx xxxxx $ 0
Burns, Shannon M xxxxxx xxxxx $ 420
Butler, Dwight R xxxxxx xxxxx $2,100
Cafaro, Stacy A xxxxxx xxxxx $ 0
Carr, Gezelle V xxxxxx xxxxx $ 0
<PAGE>
<PAGE> 80
SCHEDULE 3.22 (cont'd.)
- -----------------------
10/31/94 Commissions,
Annual Residuals Car
Employee Name Salary & Bonus Allowance
- ------------------------------------------------------------------
Casey, Melinda L xxxxxx xxxxx
Chavez, Tamara A xxxxxx
Colman, Cheryl L xxxxxx
Corioso, John xxxxxx
Corrigeux, Dale F xxxxxx xxxxx $ 735
Crawford, Cynthia W xxxxxx xxxxx $ 0
Crittenden, Ashley A xxxxxx
Danzl, Kirk C xxxxxx
Davis, Lueberta xxxxxx xxxxx $ 0
Deblock, Leslie A xxxxxx
Demers, Sherri D xxxxxx xxxxx $1,050
Domingo, Cyncha P xxxxxx
Domke, Karen M xxxxxx
Durham, Gregory L xxxxxx
Eagle, Todd R xxxxxx xxxxx $ 630
Edwards, Wes xxxxxx xxxxx $ 0
Edwards, Joye I xxxxxx xxxxx $ 0
Elliott, Chris S xxxxxx xxxxx $3,500
Ewen, Susan L xxxxxx
Fairhurst, Neil xxxxxx
Feil, Mark xxxxxx xxxxx $ 0
Fischer, Brenda K xxxxxx
Fleming, Wade A xxxxxx xxxxx
Fowler, Sheri L xxxxxx xxxxx $1,890
Funkhouser, Maria T xxxxxx xxxxx $2,100
Fyhrie, Peter xxxxxx xxxxx $2,100
Galbraith, Kim xxxxxx xxxxx $1,050
Gastfield, Amy R xxxxxx
Gilless, John A xxxxxx xxxxx
Gilmore, Robert S xxxxxx xxxxx $ 420
Giovannetti, Richard xxxxxx
Gitts, Ty J xxxxxx xxxxx $ 0
Goren, Lisa J xxxxxx xxxxx $ 0
Grube, Jenna xxxxxx xxxxx
Groff, Brenda J xxxxxx
<PAGE>
<PAGE> 81
SCHEDULE 3.22 (cont'd.)
- -----------------------
10/31/94 Commissions,
Annual Residuals Car
Employee Name Salary & Bonus Allowance
- ------------------------------------------------------------------
Gudorf, Craig M xxxxxx
Guillory, DeAnna V xxxxxx
Guzman, Rae M xxxxxx
Halunen, Cindy M xxxxxx
Hanneman, Renee xxxxxx
Harmon, Beverly J xxxxxx xxxxx $2,100
Harper, Charles R xxxxxx xxxxx $2,100
Harris, Robert C xxxxxx xxxxx
Harvey, David E xxxxxx xxxxx $2,100
Hassenmiller, Susan L xxxxxx
Hawthorne, Jeri R xxxxxx xxxxx $ 0
Hayden, Timothy J xxxxxx xxxxx $2,100
Heaton, John J xxxxxx xxxxx $ 0
Hendricks, Rebecca A xxxxxx
Hetzel, Monica S xxxxxx xxxxx
Hird, Wesley B xxxxxx
Hjelmstad, Paul G xxxxxx
Hodgson, Lavon M xxxxxx xxxxx
Hoepfner, Vicki A xxxxxx xxxxx $ 683
Hofeldt, Cynthia M xxxxxx xxxxx $1,050
Hollis, Debra xxxxxx xxxxx $1,050
Hornick, Stephanie J xxxxxx
Hough, Terry J xxxxxx xxxxx $2,600
Isaacs, Christine M xxxxxx xxxxx $2,100
Johnson, Michael B xxxxxx xxxxx $2,100
Johnson, Judith xxxxxx
Kacmarynski, Helen M xxxxxx xxxxx $ 0
Keele, Ronald E xxxxxx xxxxx $ 0
Keenan-Cooley, Patricia xxxxxx
Kelley, Lisa E xxxxxx
Kellogg, Lisa J xxxxxx
Kenagy, Renee M xxxxxx xxxxx $2,100
Kennedy, Sandra C xxxxxx xxxxx $ 0
King, William J xxxxxx xxxxx
<PAGE>
<PAGE> 82
SCHEDULE 3.22 (cont'd.)
- -----------------------
10/31/94 Commissions,
Annual Residuals Car
Employee Name Salary & Bonus Allowance
- ------------------------------------------------------------------
Kish, Robert D xxxxxx xxxxx $2,100
Klees, Donna L xxxxxx xxxxx $1,050
Knudson, Steven R xxxxxx
Lahiri, Anindita T xxxxxx xxxxx $ 500
Larkin, Karen L xxxxxx xxxxx $2,100
Larson, Aleta J xxxxxx xxxxx
Lawrence, Lance D xxxxxx
Lew, John xxxxxx xxxxx
Logan, Jamie S xxxxxx xxxxx $ 0
Lontz, Marguerite M xxxxxx
Loughman, Jennifer D xxxxxx
Lovitt, Joy S xxxxxx xxxxx $ 0
Ludwikowski, Scott M xxxxxx
Magill, Stacy A xxxxxx xxxxx $ 0
Manderscheid, Michelle xxxxxx xxxxx $ 0
Marquez, Lisa R xxxxxx
Mathews, Sandra L xxxxxx xxxxx $ 0
Matthews, Amy L xxxxxx xxxxx $ 0
McCants, Zarina M xxxxxx
McCormick, James S xxxxxx xxxxx $1,210
McGeath, Shannon E xxxxxx xxxxx $ 0
McGill, Lisa M xxxxxx xxxxx $2,100
McGovern, Kevin S xxxxxx xxxxx $2,200
McKeighen, Floyd xxxxxx xxxxx $ 0
McKeown, Beth A xxxxxx xxxxx $1,680
Miller, Shirley E xxxxxx xxxxx
Miller, Patty M xxxxxx
Mitchell, John P xxxxxx xxxxx $ 880
Moede, Lyn A xxxxxx
Mohn, Heidi xxxxxx xxxxx $ 0
Morin, Mark xxxxxx xxxxx
Morrow, Troy W xxxxxx xxxxx $ 0
Mullins, Glenda F xxxxxx
Mulvaney, Susan H xxxxxx
<PAGE>
<PAGE> 83
SCHEDULE 3.22 (cont'd.)
- -----------------------
10/31/94 Commissions,
Annual Residuals Car
Employee Name Salary & Bonus Allowance
- ------------------------------------------------------------------
Murphy, Mark A xxxxxx xxxxx $ 840
Nate, Tracey xxxxxx xxxxx $2,100
Nelson, Wayne M xxxxxx
Nguyen, Phuong T xxxxxx
Nobbe, Tracy A xxxxxx
Noble, John P xxxxxx
Northam, Dena M xxxxxx xxxxx
O'Leary, Michael J xxxxxx xxxxx
O'Leary, Michelle L xxxxxx
Okendo, Connie J xxxxxx
Olson, Stephanie K xxxxxx
Olson, Stacy B xxxxxx xxxxx
Osburn, Kathryn L xxxxxx xxxxx
Palma, John P xxxxxx
Parker, David K xxxxxx
Parker, Randal L xxxxxx xxxxx
Peek, Sandra S xxxxxx xxxxx $ 0
Pelcher, Beverly A xxxxxx xxxxx $1,500
Peters, Gail A xxxxxx
Peterson, Kent W xxxxxx xxxxx $ 0
Petty, Virginia G xxxxxx xxxxx $ 0
Peiper, Jeffrey M xxxxxx xxxxx $1,050
Pitman, James E xxxxxx xxxxx
Plumb, Jeff C xxxxxx xxxxx $ 0
Porrazzo, Janet K xxxxxx
Prussack, James xxxxxx xxxxx $2,100
Przezdziecki, Angela M xxxxxx
Przezdziecki, Edna J xxxxxx
Puthuff, Lorelei xxxxxx xxxxx $ 0
Quinlan, Caroline R xxxxxx xxxxx $ 0
Raiswell, Helen E xxxxxx xxxxx $1,675
Ramirez, Connie M xxxxxx xxxxx $ 0
Reasor, Daniel S xxxxxx
Reasor, Mary E xxxxxx
<PAGE>
<PAGE> 84
SCHEDULE 3.22 (cont'd.)
- -----------------------
10/31/94 Commissions,
Annual Residuals Car
Employee Name Salary & Bonus Allowance
- ------------------------------------------------------------------
Repko, Julie A xxxxxx xxxxx $2,100
Rex, Randy L xxxxxx
Reyes, Marcia L xxxxxx
Reynolds, Jacqueline M xxxxxx
Richards, Greg L xxxxxx xxxxx $1,313
Richards, Sandra L xxxxxx xxxxx $ 770
Rickett, Sandra xxxxxx xxxxx $ 0
Rivers, Dona R xxxxxx xxxxx
Roehl, Richard J xxxxxx
Rogers, Dennis xxxxxx
Rootness, Karla A xxxxxx
Rowley, Jeniele L xxxxxx
Ruelle, Julie C xxxxxx xxxxx $ 0
Ryan, Michael J xxxxxx xxxxx $ 0
Rydman, Michelle R xxxxxx xxxxx $2,100
Schardein, Dana M xxxxxx xxxxx
Schermerhorn, Marcia G xxxxxx xxxxx $1,050
Schimerowski, Randa xxxxxx xxxxx $ 0
Schmidt, Robyn S xxxxxx xxxxx $ 0
Schmiedlin, Bruce R xxxxxx
Schmiedlin, Terri L xxxxxx
Schmorhum, Ardyth K xxxxxx xxxxx $1,050
Schneider, David P xxxxxx xxxxx $ 0
Schrock, Deborah K xxxxxx xxxxx
Schuppe, Kristen M xxxxxx xxxxx $2,100
Shahijanian, Adrineh xxxxxx
Sherman, Teo A xxxxxx xxxxx $1,890
Shields, Jacqueline xxxxxx xxxxx $ 0
Shore, Kenneth A xxxxxx xxxxx $ 0
Simon, Steven C xxxxxx
Simon, Tammy K B xxxxxx
Slack, Glen E xxxxxx xxxxx $ 0
Smith, Scott A xxxxxx xxxxx $ 0
Smith, Nathan B xxxxxx xxxxx $2,100
<PAGE>
<PAGE> 85
SCHEDULE 3.22 (cont'd.)
- -----------------------
10/31/94 Commissions,
Annual Residuals Car
Employee Name Salary & Bonus Allowance
- ------------------------------------------------------------------
Smith, Gary G xxxxxx xxxxx
Smith Jr., James A xxxxxx xxxxx $ 600
Squires, Gary xxxxxx xxxxx $3,150
Stabenow, Susan M xxxxxx xxxxx $ 0
Stafford, Daniel A xxxxxx xxxxx
Stevenson, Diane xxxxxx
Stuiber, Shannon C xxxxxx xxxxx $ 0
Stitz, Julie xxxxxx xxxxx $ 0
Sullivan, Susan xxxxxx
Taylor, Jeffrey J xxxxxx xxxxx $1,470
Tholson, Michael G xxxxxx xxxxx $1,050
Thompson, Shannon S xxxxxx xxxxx $ 735
Tiong, Tai-Hoom xxxxxx
Torres, Osar D xxxxxx
Trudell, Cynthia A xxxxxx
Trusley, Bradley B xxxxxx xxxxx $ 0
Vermette, Ann L xxxxxx xxxxx $ 0
Wagner, Susan C xxxxxx xxxxx $ 0
Wagner, Amy C xxxxxx xxxxx $2,100
Walter, Chris xxxxxx
Warford, John L xxxxxx
Warner, Anthony L xxxxxx xxxxx $ 0
Weinert, James J xxxxxx
Whalen, Stephen xxxxxx xxxxx $2,100
White, Tina G xxxxxx
White, Debbie L xxxxxx xxxxx $ 0
White, Colin R xxxxxx
Wiley, Irene R xxxxxx xxxxx $ 0
Winter, Cheri K xxxxxx xxxxx $ 0
Wolverton, Linda J xxxxxx
Wylie, Adam xxxxxx xxxxx $2,100
Yessen, Jana E xxxxxx
Young, Emeline xxxxxx xxxxx $ 0
Young, Richard E xxxxxx xxxxx $ 0
<PAGE>
<PAGE> 86
SCHEDULE 3.22 (cont'd.)
- -----------------------
BOARD OF DIRECTORS
Board of Directors Officer
- ------------------ -------
Steve Simon yes
James Weinert yes
William King yes
William Thomas no
John Fauth no
<PAGE>
<PAGE> 87
SCHEDULE 3.26
- -------------
TAX RETURNS
-----------
Pending Audits (see Schedule 3.7 for further details):
State of Montana - Montana Telephone tax audit
California State Board of Equalization -- Emergency
Telephone Users Surcharge
American Sharecom has customers that originate calls from regions
where American Sharecom does not have nexus. Therefore, state,
local and regulatory agency taxes are being neither assessed nor
remitted in those jurisdictions.
In one state, American Sharecom and its predecessor determined that
they were not obliged to collect and remit local sales tax. This
policy was changed in 1992.
<PAGE>
<PAGE> 88
SCHEDULE 3.27
- -------------
BANK ACCOUNTS
-------------
Bank Acct. # Description Authorized Signers
- ------------------------------------------------------------------------
Norwest Bank-MN 10-49-711 Lockbox Simon/Weinert/King/Ryan
Norwest Bank-Lewistown 00-187-1 Disburs. Simon/Weinert/King/
Ryan/Groff
Norwest Bank-Red Wing 00-22760 Disburs. Simon/Weinert/King/
Ryan/Groff
Norwest Bank-MN 10-49-703 Payroll Simon/Weinert/King/Ryan
1st Bank-Milwaukee 1-823-2219-6706 Lockbox Simon/Weinert/King
Key Bank-Seattle 048-319875 Lockbox Simon/Weinert/King
1st Bank-Billings 11 39823 Lockbox Simon/Weinert/King
U.S.Bank-Spokane 100 7208-612 Lockbox Simon/Weinert/King
Hilltop Natl Bank-WY 63144 Lockbox Simon/Weinert/King
Bank of CA-Sacramento 018-077134 CA Deposit Simon/Weinert/King/Ryan
1st Interstate Bank-NV 1290062984 NV Deposit Simon/Weinert/King
PETTY CASH ACCOUNTS
-------------------
Location Balance Signers
- ---------------------------------------------------------------------
Minneapolis $ 250 Site managers & designated employees
Seattle $2,000 Site managers & designated employees
Execuline $3,250 Site managers & designated employees
Billings $1,150 Site managers & designated employees
Spokane $ 750 Site managers & designated employees
Helena $ 100 Site managers & designated employees
Casper $ 800 Site managers & designated employees
Milwaukee $1,350 Site managers & designated employees
Yakima $ 850 Site managers & designated employees
Portland $1,000 Site managers & designated employees
Redding $ 100 Site managers & designated employees
Kennewick $ 300 Site managers & designated employees
Eugene $ 500 Site managers & designated employees
<PAGE>
<PAGE> 89
SCHEDULE 3.29
- -------------
CONFLICT OF INTEREST
--------------------
Steven C. Simon and James J. Weinert have signed separate
Collateral Pledge Agreements, dated February 2, 1989, granting
Norwest Bank security interest in all of ASI stock.
Loans, Payroll and Travel Advances to Third Parties as of 10/31/94:
Steve Simon $50,000
Jim Weinert $37,343
Mark Feil $ 7,925
Peter Fyhrie $ 7,500
Hal Urbanek $ 3,000
David Austin $ 688
Tina White $ 650
Jeff Plumb $ 598
Gezzelle Carr $ 500
Greg Richards $ 244
John Heaton $ 200
Randa Schimerowski $ 200
Richard Giovanetti $ 200
John Noble $ 200
Ann Vermette $ 100
<PAGE>
<PAGE> 90
SCHEDULE 3.36
- -------------
DISTRIBUTIONS
-------------
Debt Line
Total Net to Debt Pymts/ S-Corp of Cash
Month Distr. Tax Owners Pymts Distr. Income Credit Balance
- -------------------------------------------------------------------
8/93 xx 0 xx xx xx xx xx xx
9/93 xx 0 xx xx xx xx xx xx
10/93 - xx xx xx xx xx
11/93 xx - xx xx xx xx xx xx
12/93 xx - xx xx xx xx xx xx
1/94 xx xx xx xx xx xx xx
2/94 - - xx xx xx
3/94 xx xx xx xx xx - xx
4/94 xx xx xx xx xx xx xx
5/94 xx xx xx xx xx xx xx
=========================================================
%/Income 48.9% 30.4% 59.8% 108.7%
6/94 xx xx xx xx xx xx - xx
7/94 xx xx xx xx - xx
8/94 xx xx xx xx - xx
9/94 xx xx xx xx xx - xx
10/94 xx xx xx xx - xx
11/94 xx xx xx xx xx xx xx
12/94 xx xx - xx xx xx
1/95 xx xx xx xx xx xx
=========================================================
%/Income 92.7% 36.0% 1.2% 93.9%
---------------------------------------------------------
Total xx xx xx xx xx xx
=========================================================
%/Income 72.5% 33.4% 28.1% 100.7%
(1) Our policy: "Free Cash Flow is distributed according to the
following priorities; first, for the payment of taxes; and second,
for the repayment of debt. The excess, if any is distributed to
shareholders."
(2) The term "distributed" encompasses three items: the payment of
income taxes; the repayment of the principal portion of any
outstanding debt; and distributions to shareholders.
<PAGE>
<PAGE> 91
SCHEDULE 7.5
- -------------
REGISTRATION RIGHTS AGREEMENT
Registration Rights Agreement, dated as of , 1994
(this "Agreement"), among ROCHESTER TELEPHONE CORPORATION, a New
York corporation (the "Company") and the other parties signatory
hereto (each a "Shareowner").
W I T N E S S E T H :
WHEREAS, pursuant to an agreement (the "Acquisition
Agreement") dated as of , 1994 among the Company,
American Sharecom, Inc., a Minnesota corporation ("ASI"), Steven C.
Simon and James G. 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 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.
(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
<PAGE>
<PAGE> 92
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.
(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
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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 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
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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 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
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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. 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 its 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 its Registrable
Securities included in such registration pursuant to this Section
3(a), 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 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
unless, at the time such request is received by the Company, (i)
such Holder holds at least % 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
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Securities pursuant to this Section 3(a) on only one occasion and
(ii) the Company's obligations under this Section 3(a) 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 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 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, 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) the fees and
disbursements of counsel to such Holder and (iii) all underwriting
discounts and commissions and transfer taxes, if any, applicable to
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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 Company shall have the right to select in good faith
the investment banker or bankers and managers to administer the
offering, provided, however, that such investment banker or bankers
and managers shall be reasonably satisfactory to the Holders of a
majority of Registrable Securities requested to be registered
pursuant to Section 3(a).
(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
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.
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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 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
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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 statement which shall satisfy
the provisions of Section 11(a) of 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
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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, 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
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Act pursuant to Section 2 or 3, the Company will, and 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 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,
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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 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
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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 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
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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 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
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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 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
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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
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. 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
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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 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:
Rochester Telephone Corporation
180 South Clinton Avenue
Rochester, New York 14646
Attn: John K. Purcell
Corporate Vice President
With required copies to:
Rochester Telephone 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
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With a required copy to:
Maun & Simon, PLC
2900 Norwest Center
90 South Seventh Street
Minneapolis, Minnesota 55402-4133
Attn: Albert A. Woodward
If to James G. Weinert:
James G. 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
If to any other Shareowner, 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 other
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.
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<PAGE> 109
(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.
ROCHESTER TELEPHONE CORPORATION
By: -------------------------
Name:
Title:
- -----------------------------
Steven C. Simon
- -----------------------------
James G. Weinert
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<PAGE> 110
SCHEDULE 8.14
- -------------
EMPLOYMENT AND NON-COMPETE AGREEMENT
THIS EMPLOYMENT AND NON-COMPETE AGREEMENT is made as of the
day of , 1994 (the "Effective Date"), by and among AMERICAN
SHARECOM, INC., a Minnesota corporation ("Company"), ROCHESTER
TELEPHONE CORPORATION ("Parent") and JAMES J. WEINERT
("Executive").
PREAMBLE
WHEREAS, pursuant to a Stock Acquisition Agreement dated as of
, 1994 (the "Acquisition Agreement"), Company has become
an indirect subsidiary of Parent; and
WHEREAS, Company and Parent wish to retain the services of
Executive as provided in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and of the
respective covenants and agreements herein contained, Company,
Parent and Executive have agreed as follows:
1. Terms of Employment.
1.1 Employment. Company agrees to continue to employ
Executive, and Executive agrees to continue to serve Company, on
the terms and conditions set forth herein.
1.2 Position and Duties. Executive shall continue to have
such powers and duties normally associated with his position as
in a company of similar size and nature as
Company and shall have such other powers and duties as may from
time to time be prescribed by the Board of Directors of Company or
Parent. Executive shall devote substantially all his working time
and efforts to the business and affairs of Company and its
affiliates.
1.3 Term. The term of this Agreement ("Term") shall be 24
months after the Effective Date, unless earlier terminated or
extended.
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2. Compensation.
2.1 Base Salary. Executive's Base Salary shall be $167,500
for the first 12 month period which begins on the Effective Date.
Executive's Base Salary in the second 12 months of the Term shall
be $184,250 if Company achieves or exceeds the maximum targets set
forth in Section 2.2(a) below and $150,750 if Company does not
achieve the minimum targets set forth in Section 2.2(a) below.
Executive's Base Salary shall be adjusted pro rata for achievements
which fall between the targets set forth in Section 2.2(a) below.
The Base Salary may be adjusted thereafter by Company in accordance
with Parent's compensation program as it changes from time to time.
Executive's Base Salary shall be payable in accordance with
Company's normal payroll policies.
2.2 Performance Bonus. Executive shall be eligible to
receive a performance bonus in the following amounts and upon
satisfaction of the following conditions:
(a) Following the end of the first 12 months of the
Term, Executive shall be entitled to receive as soon as practicable
as possible after determination a bonus equal to: (i) 50% of his
Base Salary payable during the first 12 months of the Term if the
revenues of Company for the first 12 months of the Term are at
least $140,000,000 and (ii) 50% of his Base Salary payable during
the first 12 months of the Term if the earnings before interest,
taxes and depreciation amortization ("EBITDA") of Company for the
first 12 months of the Term is at least $31,000,000 ((i) and (ii)
together being the maximum targets). Executive shall not be
entitled to any bonus if (iii) the revenues of Company for the
first 12 months of the Term are less than $130,000,000 and (iv) the
EBITDA of Company for the first 12 months of the Term is less than
$27,500,000 ((iii) and (iv) together being the minimum targets).
The percent of Executive's Base Salary to be paid as a bonus
hereunder shall be adjusted pro rata for results which fall between
the maximum and minimum targets. If Company's results exceed the
maximum targets, Executive's bonus shall be increased by .75% of
each dollar of revenue in excess of $140,000,000 and by 7.5% of
each dollar of EBITDA in excess of $31,000,000.
(b) Following the end of the second 12 months of the
Term, Executive shall be entitled to receive a bonus equal to: (i)
25% of his Base Salary payable during the second 12 months of the
Term if the revenues of Company for the second 12 months of the
Term are at least $150,000,000 and (ii) 25% of his Base Salary
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<PAGE> 112
payable during the second 12 months of the Term if the EBITDA of
Company for the second 12 months of the Term is at least
$33,000,000 ((i) and (ii) together being the maximum targets).
Executive shall not be entitled to any bonus if (iii) the revenues
of Company for the second 12 months of the Term are less than
$140,000,000 and (iv) the EBITDA of Company for the second 12
months of the Term is less than $31,000,000 ((iii) and (iv)
together being the minimum targets). The percent of Executive's
Base Salary to be paid as a bonus hereunder shall be adjusted pro
rata for results which fall between the maximum and minimum
targets. If Company's results exceed the maximum targets,
Executive's bonus shall be increased by .75% of each dollar of
revenue in excess of $150,000,000 and by 7.5% of each dollar of
EBITDA in excess of $31,000,000. Executive shall be entitled to
receive up to 50% of his Base Salary during the second 12 months of
the Term if Parent, in Parent's sole judgment deems Company to have
been successful in aligning its service offerings and operations
with those of Parent and its affiliates.
2.3 Expenses. During the term of Executive's employment
hereunder, Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred in performing
services hereunder, provided that Executive properly accounts
therefor in accordance with written Company policy. Such expenses
shall include first class air fare when travelling on Company
business.
2.4 Compensation and Benefit Programs of Company. While
employed hereunder, Executive shall be eligible to participate in
the benefit programs and plans maintained by Company for the
benefit of its management employees and in Parent's Executive
Compensation Program, at the level of Division Vice President which
is maintained by Parent for its executive level employees (or any
successor programs implemented by Company or Parent from time to
time). During the Term and, provided Executive has not been
terminated for Cause, for one year thereafter, Company shall pay
for Executive's lease of a new automobile.
3. Termination of Employment.
3.1 Upon Death. Executive's employment hereunder shall
terminate upon his death.
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<PAGE> 113
3.2 By Company. Company may terminate Executive's employment
hereunder at any time with or without Cause.
3.3 By Executive. Executive may terminate his employment
hereunder at any time for any reason.
3.4 Notice of Termination, Payments. Any termination of
Executive's employment hereunder (other than by death) shall be
communicated by 30 days advance written Notice of Termination by
the terminating party to the other party to this Agreement;
provided that no advance Notice of Termination of Executive for
Cause by Company is required. Unless otherwise provided in Section
4, any amounts owed by Company to Executive pursuant to Section 4
shall be paid on the Date of Termination.
4. Payments in the Event of Termination of Employment.
4.1 Payments in the Event of Termination by Company for Cause
or Voluntary Termination by Executive. If Executive's employment
hereunder is terminated by Company for Cause or by Executive other
than for Good Reason, Company shall pay Executive (a) his accrued
and unpaid Base Salary through the Date of Termination on the Date
of Termination or as soon thereafter as is practicable and (b) any
payments or other rights or benefits Executive may be entitled to
receive pursuant to any retirement, pension or other employee
benefit or compensation plan or life insurance policy maintained by
Company at the time or times provided therein.
4.2 Payments in the Event of Any Other Termination of
Employment. If Executive's employment hereunder is terminated by
Company other than for Cause, Company shall pay Executive (i) 18
months' worth of the then applicable Base Salary on the Date of
Termination or as soon thereafter as is practicable; and (ii) any
payments or other rights or benefits Executive may be entitled to
receive pursuant to any retirement, pension or other employee
benefit or compensation plan or life insurance policy maintained by
the Company at the time or times provided therein.
Executive shall not be required to mitigate the amount of
any payment provided for in this Section 4.2 by seeking other
employment or otherwise, and no such payment shall be offset or
reduced as a result of Executive obtaining new employment.
5. Confidentiality; Non-Compete.
5.1 Confidentiality. Executive shall not, without the
prior written consent of Parent or Company, divulge, disclose or
<PAGE>
<PAGE> 114
make accessible to any other person, firm, partnership or
corporation or other entity any Confidential Information pertaining
to the business of Parent or Company except (a) while employed by
Parent or Company in the business of and for the benefit of Parent
or Company or (b) when required to do so by a court of competent
jurisdiction, by any governmental agency having supervisory
authority over the business of Parent or Company, or by any
administrative body or legislative body (including a committee
thereof) with jurisdiction to order Executive to divulge, disclose
or make accessible such information. For purposes of this Section
5.1, "Confidential Information" shall mean non-public information
concerning Parent's or Company's financial data, strategic business
plans, product development (or other proprietary product date),
customer lists, marketing plans and other proprietary information,
except for specific items which have become publicly available
information other than through a breach by Executive of his
fiduciary duty or any confidentiality agreement. Confidential
Information does not include information the disclosure of which
cannot reasonably be expected to adversely affect the business of
Parent or Company. This confidentiality covenant has no temporal
or geographical restriction. Upon termination of this Agreement,
Executive shall promptly return to Company all Confidential
Information and any other tangible product or document which has
been produced by, received by or otherwise submitted to Executive
during the Term or prior to the Expiration Date (as defined in
Section 5.2 below), and shall not retain any copies thereof.
5.2 Non-Compete.
(a) It is acknowledged by Executive and Parent, that as
a co-owner of Company prior to its acquisition by Parent and as an
executive level employee of Company thereafter, Executive has
developed a special, unique and extraordinary expertise in
telecommunications. Therefore, in consideration of the payment by
Parent to Executive on the Effective Date of the sum of $1,200,000,
Executive covenants and agrees with Parent and Company that, during
the period commencing on the Effective Date and ending five years
after the later of (i) the expiration of the Term (as it may be
extended by mutual agreement of Parent, Company and Executive) or
(ii) the end of any contract or arrangement pursuant to which
Executive is providing consulting or other services to Company or
Parent on a regular and continuous basis (the later of (i) and (ii)
<PAGE>
<PAGE> 115
being known as the "Expiration Date"), he shall not directly or
indirectly (whether as owner, partner, consultant, employee, or
otherwise), engage in any "Restricted Business", as defined below;
nor shall Executive solicit any person or entity which is a
customer of Company on the Expiration Date; nor shall Executive
solicit the employment of or a consulting or like arrangement with
a person who is then or within the prior six months was an employee
of Company or Parent or any of its affiliates.
(b) For the purposes of this Agreement, a "Restricted
Business" is (i) a line of business engaged in by Parent or any of
its affiliates (including Company) on the Expiration Date, (ii) in
any geographic area in which such line of business is engaged in by
Parent or any of its affiliates and the 50 surrounding miles
contiguous thereto and (iii) which line of business produces (or is
projected to produce in any of the three succeeding fiscal years
after the Expiration Date) over 5% of the consolidated revenues of
Parent.
(c) For purposes of this Section 5.2, Executive shall
not be deemed to be in violation of this covenant if (i) Executive
owns beneficially and of record less than 1% of the outstanding
capital stock of a company that would otherwise be a competing
entity; (ii) such company is subject to the periodic and other
reporting requirements of Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended; and (iii) the equity
of such company is regularly traded on a national stock exchange.
(d) Executive, Parent and the Company agree that this
covenant not to compete is a reasonable covenant under the
circumstances and supported by the consideration stated above, and
further agree that if in the opinion of any court of competent
jurisdiction, such restraint is not reasonable in any respect, such
court shall have the right, power and authority to excise or modify
such provision or provisions of this covenant as to the court shall
appear not reasonable and to enforce the remainder of the covenant
as so amended.
5.3 Remedies for Breach. (a) Executive agrees that any
breach of the terms of this Section 5 would result in irreparable
injury and damage for which there would be no adequate remedy at
law, and that, in the event of such breach or any threat of breach
(a "Breach"), Parent shall be entitled to an immediate injunction
and restraining order to prevent such Breach, without having to
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<PAGE> 116
prove damages, in addition to any other remedies to which Parent
may be entitled at law or in equity. The provisions of this
Section 5 shall survive any termination of this Agreement and the
Expiration Date. The existence of any claim or cause of action or
otherwise, shall not constitute a defense to the enforcement of the
covenants and agreements of this Section 5.
(b) Executive shall indemnify the Company, Parent and
its affiliates (the "Section 5 Indemnified Parties") and hold the
Section 5 Indemnified Parties harmless from any and all loss,
damage and expense of every nature and character arising or
resulting from a Breach, including but not limited to, any loss or
damage estimated in good faith by Parent or Company to have been
suffered by Parent or Company due to a Breach, any and all
judgments or awards rendered by a court in favor of Parent or
Company as a result of a Breach, all amounts agreed to be paid by
Executive in connection with any settlement entered into with
Parent or Company in satisfaction of any claim that a Breach has
occurred and all reasonable attorneys' and experts' fees incurred
by Parent or Company in enforcing its rights under this Section 5
(all of the foregoing being known herein as "Section 5 Losses" or,
individually, a "Section 5 Loss").
(c) Prior to the termination of the Escrow Agreement in
accordance with its terms, the Escrow Fund shall be available to
satisfy any Section 5 Losses incurred by any Section 5 Indemnified
Party. The procedure for any claims by the Section 5 Indemnified
Parties (a "Section 5 Notice of Claim") against Executive shall be
governed by Section 11.3 of the Acquisition Agreement, provided
that the terms Parent, Executive, Section 5 Loss, Section 5
Indemnified Parties, Section 5 Notice of Claim and Section 5 Notice
of Disputed Claim, shall for purposes of this Agreement be
substituted, respectively, for Rochester, Sellers' Representative
and Sellers, Article XI Loss, Article XI Indemnified Parties,
Article XI Notice of Claim and Article XI Notice of Disputed Claim
as may be applicable.
(d) The indemnification provided in this Section 5 shall
not be the exclusive remedy available to Company, Parent and its
affiliates for any breach of this Agreement by Executive.
6. Successors and Assigns. This Agreement and all rights of
Executive hereunder shall inure to the benefit of and be
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<PAGE> 117
enforceable by, Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devises
and legatees.
7. Withholding. All payments required to be made by the Company
hereunder shall be subject to the withholding of such amounts as
are required to be withheld pursuant to any applicable law or
regulation.
8. Certain Defined Terms. As used herein, the following terms
have the following meanings:
"Agreement" shall mean this Employment and Non-Compete
Agreement, as the same may be amended, supplemented or otherwise
modified from time to time.
"Base Salary" shall mean the annual salary of the
Executive in effect from time to time under Section 2.1.
"Cause" shall mean with respect to termination of
Executive's employment hereunder (i) an act or acts of personal
dishonesty by Executive which results in a not insubstantial
personal enrichment of Executive at the expense of Company or
Parent, (ii) an act or acts or personal dishonesty by Executive
which causes substantial injury to the business, operations or
reputation of Company or Parent, (iii) material breach (other than
as a result of a Disability) by Executive of Executive's
obligations under this Agreement which action was (a) undertaken
without a reasonable belief that the action was in the best
interest of Company or Parent and (b) not remedied within ten days
after receipt of written notice from Company or Parent specifying
the alleged breach, or (iv) the conviction of Executive of a
felony.
"Date of Termination" shall mean, with respect to
Executive, the date of termination of Executive's employment
hereunder after the notice period provided by Section 3.4.
"Disability" shall mean Executive's physical and mental
condition which prevents continued performance of his duties
hereunder, if Executive establishes by medical evidence that such
condition will be permanent and continuous during the remainder of
Executive's life or is likely to be of at least three years'
duration.
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<PAGE> 118
"Good Reason" shall mean, with respect to Executive, any
one or more of the following: (i) the relocation of Company's
principal executive offices to a location outside the
Minneapolis-St. Paul Metropolitan Area; or (ii) a failure by
Company or Parent to comply with any material provision of this
Agreement which has not been cured within ten days after receipt of
written notice by Company or Parent specifying the alleged
noncompliance. In order for Executive's termination of his
employment to be considered for Good Reason, such termination must
occur within one month after the event giving rise to such Good
Reason.
"Notice of Termination" shall mean a notice specifying
the Date of Termination, which notice shall (i) indicate the
specific termination provision (if any) in this Agreement
applicable to the termination, and (ii) set forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so
indicated.
9. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by Executive and a
Corporate Vice President of Parent. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party
which are not set forth expressly in this Agreement. There shall
be no right of set-off or counterclaim, in respect of any claim,
debt or obligation, against any payments to Executive, his
dependents, beneficiaries or estate provided for in this Agreement.
The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of New York,
without regard to principles of conflicts of laws.
10. Validity. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
11. No Limitation. Under no circumstances shall payment to
Executive of any amount required to be paid under any provision
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<PAGE> 119
hereof, or provision to Executive of any other benefit or
compensation required to be provided under any provision hereof,
limit or reduce any other obligation of Company or Parent, as
applicable, to make any payment or provide any benefit to Executive
pursuant to any other provision hereof, except that Executive shall
not be entitled to receive any benefits under any severance plan or
program maintained by either Company or Parent in addition to the
payments to be made to Executive pursuant to Section 4 of this
Agreement.
12. Parent Undertaking. Parent hereby agrees to cause Company to
perform all of its obligations hereunder and Executive shall be
deemed to have entered into this Agreement in reliance upon the
undertaking set forth herein.
13. Notices. All notices and other communications given or made
pursuant to this Agreement shall be in writing and personally
delivered or sent by a nationally recognized overnight courier or
by telecopy to the parties at the following addresses:
If to Executive:
James J. Weinert
If to Parent or Company:
John K. Purcell
Frontier Corporation
180 South Clinton Avenue
Rochester, New York 14646-0700
with a required copy to:
Helen A. Zamboni, Esq.
Frontier Corporation
180 South Clinton Avenue
Rochester, New York 14646-0700
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<PAGE> 120
or to such other person or address as any party shall specify by
notice in writing to the other. All such notices, requests,
demands, waivers and communications shall be deemed to have been
received by the relevant party on the date of personal delivery to
such party's address, addressed to the attention of the appropriate
person specified above, on the business day following the date on
which such notice was sent by overnight courier to such party's
address, addressed to the attention of the appropriate person
specified above or, if such notice is sent by telecopy, on the date
that such telecopy is confirmed as being received by the recipient.
IN WITNESS WHEREOF, Executive, Parent and Company have caused
this Agreement to be signed as of the Effective Date.
EXECUTIVE
--------------------------
James J. Weinert
AMERICAN SHARECOM, INC.
By: ----------------------
ROCHESTER TELEPHONE CORPORATION
By: ----------------------
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<PAGE> 121
SCHEDULE 8.17
- -------------
ESCROW AGREEMENT
THIS AGREEMENT, dated as of , 1995 among
ROCHESTER TELEPHONE CORPORATION, a New York corporation
("Frontier"), STEVEN C. SIMON as representative (in such capacity,
the "Sellers' Representative") of the Sellers (as defined in the
Stock Acquisition Agreement referred to below), and
as escrow agent (the "Escrow Agent"). All terms not
defined herein shall have the meanings ascribed to them in the
Acquisition Agreement (as defined below).
WHEREAS, Rochester and the Sellers have entered into a Stock
Acquisition Agreement dated as of , 1994 (the
"Acquisition Agreement"; capitalized terms used herein without
definition shall have the respective meanings set forth in the
Acquisition Agreement) providing, among other things, for the
acquisition of ASI by a direct or indirect wholly-owned subsidiary
of Rochester (the "Acquisition"); and
WHEREAS, the Acquisition Agreement contemplates the due
execution and delivery of this Agreement prior to the Closing of
the Acquisition; and
WHEREAS, the Sellers are required at the Closing to deposit or
cause to be deposited with the Escrow Agent certificates
representing the number of Shares determined as provided in Section
8.17 of the Acquisition Agreement and executed stock powers or
other instruments of transfer necessary to convey good title to the
Shares (such amount, together with interest accrued on any cash
substituted in lieu of Shares, being hereinafter referred to as the
"Escrow Fund"); and
WHEREAS, the parties hereto desire to establish the Escrow
Fund to set aside a portion of the consideration to be paid to the
Sellers in connection with the Acquisition for the purpose of
providing for (i) the indemnification of the Article XI Indemnified
Parties from and against the Article XI Losses relating to the
Dissenters' Suits as set forth in Article XI of the Acquisition
Agreement and (ii) the indemnification of the Section 5 Indemnified
Parties by each of the Sellers from and against any Section 5
Losses as set forth in Section 5 of their respective Employment and
Non-Compete Agreements;
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NOW, THEREFORE, the parties hereto agree as follows:
1. Establishment of Escrow.
Pursuant to Section 8.17 of the Acquisition Agreement, the
Sellers have deposited ------- Shares of Rochester Stock in escrow
with the Escrow Agent.
No part of the Escrow Fund may be distributed from the escrow
established hereunder (the "Escrow") without the prior written
consent of the Sellers' Representative (or the applicable Executive
in connection with a Section 5 Notice of Claim) and Rochester,
except as expressly provided otherwise in Section 3. The Escrow
Agent agrees to hold and distribute the Escrow Fund and any
interest accrued thereon in accordance with the terms and
conditions of this Agreement.
2. Administration of Escrow.
2.1 So long as the Escrow Fund contains any Shares, any cash
dividends paid on such Shares shall be paid directly to the Sellers
or, at their sole option, reinvested pursuant to Rochester's
Dividend Reinvestment Plan.
2.2 So long as the Escrow Fund contains any cash, it shall be
invested by the Escrow Agent, as specifically directed in writing
by the Sellers' Representative, in (i) direct obligations of the
United States of America, (ii) obligations for which the full faith
and credit of the United States of America is pledged to provide
for the payment of principal and interest, including taxable
government money market portfolios restricted to obligations issued
or secured by the full faith and credit of the United States of
America and repurchase agreements in respect of such obligations,
(iii) commercial paper rated of the highest quality by Moody's
Investors Services, Inc. or Standard & Poor's Corporation, or (iv)
certificates of deposit issued by a commercial bank having a net
worth in excess of $500,000,000. The Escrow Agent shall have no
responsibility to determine if the investments specified in writing
by the Sellers' Representative are the types of investments
described in clauses (i) through (iv) of the preceding sentence and
neither the Escrow Agent, Rochester nor the Sellers' Representative
shall be liable or responsible for any loss resulting from any
investment or reinvestment made pursuant to this Section 2.2. The
Escrow Fund shall be increased from time to time by any and all
interest accrued and paid thereon (after payment of expenses
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incurred in connection with the investment, reinvestment or sale
thereof) pursuant to this Section 2.2. The Sellers' Representative
shall act in that capacity under this Section 2.2 and Sections 4.4
and 4.5 for the benefit of the Executives under their respective
Employment and Non-Compete Agreements.
2.3 All dividends paid or interest earned pursuant to
Sections 2.1 or 2.2 hereof shall be deemed as income of the
Sellers, and not income of either Rochester or the Escrow Agent for
federal, state and local income tax purposes, and the Sellers shall
pay any federal, state and local income taxes attributable to such
income. Upon payment of any such taxes (including without
limitation, any estimated tax payments with respect thereto), the
Sellers shall certify in writing to the Escrow Agent that they have
paid such taxes, specifying the amount thereof and specifically
referring to this Agreement.
2.4 Upon each one year anniversary of the Closing until the
termination of this Agreement, the Escrow Agent shall deliver to
each Seller a report outlining (i) the number of Shares then held
in escrow and the amount of cash, if any, of the Escrow Fund as of
such date (ii) the investment performance of the Escrow Fund during
the preceding one year period and (iii) a description of all
Notices pursuant to which distributions from the Escrow Fund have
been made during the preceding one year period and all pending
Notices as of such date, in accordance with written instructions
previously delivered to the Sellers' Representative from Rochester.
Such written instructions shall specify the names of the Sellers
and the addresses to which such report should be sent, and shall be
revised from time to time by the Sellers' Representative to reflect
changes therein.
3. Distributions from Escrow Fund.
3.1 Except as expressly provided elsewhere in this Agreement,
the Escrow Agent shall in accordance with Section 3.2 make
distributions from the Escrow Fund at any time, or from time to
time, as follows:
(a) Immediately upon receipt of and in accordance with,
written instructions jointly executed by (i) the Sellers'
Representative and Rochester with respect to any Article XI Notice
of Claim and (ii) the applicable Executive and Rochester with
respect to a Section 5 Notice of Claim;
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(b) Promptly after the expiration of 20 days from the
date of its receipt of, and in accordance with, as may be
applicable, (i) an Article XI Notice of Claim executed on behalf of
Rochester and delivered pursuant to Section 11.3 of the Acquisition
Agreement or (ii) a Section 5 Notice of Claim executed on behalf of
Rochester and delivered pursuant to Section 5 of the applicable
Employment and Non-Compete Agreement, provided that if, prior to
the expiration of such 20-day period, the Escrow Agent receives an
Article XI Notice of Disputed Claim executed by the Sellers'
Representative and delivered pursuant to Section 11.3 of the
Acquisition Agreement or, as may be applicable, a Section 5 Notice
of Disputed Claim executed by the applicable Executive and
delivered pursuant to Section 5 of his Employment and Non-Compete
Agreement, the Escrow Agent shall make such distribution only to
the extent of the undisputed amount and shall proceed in accordance
with Section 4.3 hereof with respect to the disputed amount; and
(c) To the extent any Shares or cash then remain in
escrow, on the sixth anniversary of the establishment of the Escrow
Fund.
3.2 Any amount to be distributed from the Escrow Fund
pursuant to Section 3.1 shall be distributed in the form of Shares
or, at Rochester's option, cash to the extent the Escrow Fund
consists of cash. With respect to any amount to be distributed
pursuant to Section 3.1 in the form of Shares, a number of shares
(rounded to the nearest whole share) shall be distributed equal to
the quotient obtained by dividing the amount to be distributed by
the average closing price of the Shares on the New York Stock
Exchange for the 15 trading days ending on the last trading day
prior to such distribution.
3.3 Each of the Sellers' Representative and Rochester hereby
agrees that it will deliver notices to the Escrow Agent only in
accordance with Article XI of the Acquisition Agreement and, with
respect to the Employment and Non-Compete Agreement, each of the
Executives and Rochester hereby agrees that they will deliver
notices to the Escrow Agent only in accordance with Section 5 of
their respective Employment and Non-Compete Agreement. The Escrow
Agent shall have no responsibility to determine whether any notices
received by it were delivered in accordance with Article XI of the
Acquisition Agreement or Section 5 of the Employment and Non-
Compete Agreements. The instructions referred to in Section 3.1
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hereof together with any Article XI Notice of Claim or Section 5
Notice of Claim are herein collectively referred to as "Notices".
3.4 The amount to which each Seller shall be entitled to
receive in accordance with Section 3.1 shall be equal to the total
amount to be distributed pursuant to Section 3.1 multiplied by the
applicable Percentage Interest.
4. Liability of the Escrow Agent.
4.1 The Escrow Agent shall deal with the Escrow Fund and any
interest accrued thereon only in accordance with (a) this Agreement
or (b) written instructions given in conformity with this
Agreement. The Escrow Agent shall not be bound in any way by, or
be deemed to have knowledge of any of the terms of, the Acquisition
Agreement, the Employment and Non-Compete Agreements or any other
agreement among the parties hereto other than this Agreement except
to the extent provisions of such agreements are specifically
referred to herein. The Escrow Agent shall have no duties other
than those expressly imposed on it herein and shall not be liable
with respect to any action taken by it, or any failure on its part
to act, except to the extent that such actions constitute bad
faith, gross negligence or willful misconduct.
4.2 The Escrow Agent makes no representations and has no
responsibility as to the validity, genuineness or sufficiency of
any of the documents or instruments delivered to it hereunder. The
Escrow Agent shall be entitled to rely upon any order, judgment,
certification, demand, notice, instrument or other writing
delivered to it hereunder without being required to determine the
authenticity or the correctness of any fact stated therein or the
propriety or validity of the service thereof. The Escrow Agent may
act in reliance upon any instrument or signature believed by it to
be genuine and may assume that any person purporting to give
notice, receipt or advice or make any statement or execute any
document in connection with the provisions hereof has been duly
authorized to do so. The Escrow Agent may act in reliance upon the
advice of counsel satisfactory to it in reference to any matter in
connection with this Agreement and shall not incur any liability
for any action taken in good faith in accordance with such advice.
4.3 In the event of any disagreement between the other
parties hereto resulting in adverse claims or demands being made in
connection with the Escrow Fund, or in the event that the Escrow
Agent in good faith is in doubt as to what action it should take
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hereunder, the Escrow Agent shall be entitled to retain the amount
of the Escrow Fund in dispute until the Escrow Agent shall have
received (a) a final non-appealable order of a court of competent
jurisdiction directing delivery of the amount of the Escrow Fund in
dispute, (b) an order of the arbitrators pursuant to Section 13.16
of the Acquisition Agreement or any other order of arbitrators, or
(c) written instructions jointly executed by the Sellers'
Representative and Rochester directing delivery of the amount of
the Escrow Fund in dispute, in which event the Escrow Agent shall
deliver the amount of the Escrow Fund in dispute in accordance with
such order or instructions. Any court order referred to in clause
(a) above shall be accompanied by a legal opinion by counsel for
the presenting party satisfactory to the Escrow Agent to the effect
that said order is final and non-appealable. The Escrow Agent
shall act on such court order and legal opinion without further
questions.
4.4 The reasonable fees and disbursements incurred by the
Escrow Agent in connection with its acting as Escrow Agent pursuant
to this Agreement shall be paid by Rochester. The Sellers'
Representative, on the one hand, and Rochester, on the other hand,
jointly and severally agree to indemnify the Escrow Agent and hold
the Escrow Agent harmless from and against all expenses,
disbursements, advances, charges, damages and attorneys' fees which
it in good faith may incur or suffer in connection with or arising
out of this Agreement, except for such expenses, disbursements,
advances, charges, damages and attorneys' fees incurred by reason
of acts or omissions for which the Escrow Agent is liable under the
last sentence of Section 4.1 hereof.
4.5 The Escrow Agent or any successor Escrow Agent hereunder
may resign by giving 30 days' prior written notice of resignation
to the Sellers' Representative and Rochester, and such resignation
shall be effective from the date specified in such notice. In case
the office of the Escrow Agent shall become vacant for any reason,
the Sellers' Representative and Rochester shall appoint a bank or
trust company with an office in Rochester, New York having a net
worth (as reflected in its latest publicly available certified
financial statements) in excess of $500,000,000 as successor Escrow
Agent hereunder by an instrument or instruments in writing
delivered by the Sellers' Representative and Rochester to such
successor Escrow Agent, whereupon such successor Escrow Agent shall
succeed to all rights and obligations of the retiring Escrow Agent
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as if this Agreement were originally executed by such successor
Escrow Agent, and the retiring Escrow Agent shall deliver to such
successor Escrow Agent the Escrow Fund and any dividends paid
thereon or interest accrued thereon.
4.6 The Escrow Agent shall not have any interest in the
Escrow Fund, but shall serve as escrow holder only and have only
possession thereof. Any payments of income from the Escrow Fund
shall be subject to withholding regulations then in force with
respect to United States taxes. The parties hereto will provide
the Escrow Agent with appropriate W-9 forms for tax identification
number certification or non-resident alien certifications. This
Section 4 shall survive notwithstanding any termination of this
Escrow Agreement or the resignation of the Escrow Agent.
5. Representations and Warranties.
5.1 Each of Rochester, the Sellers' Representative and the
Escrow Agent individually (and only with respect to itself or
himself, as the case may be) represents and warrants that:
(a) In the case of Rochester and the Escrow Agent, such
party is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation
and has all requisite corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
In the case of the Sellers' Representative, such party has all
requisite power and authority to execute and deliver this Agreement
and to perform his obligations hereunder.
(b) The execution and delivery of this Agreement by
Rochester and the Escrow Agent and the performance of the
transactions herein contemplated have been duly authorized by the
Board of Directors of Rochester and no further corporate action on
the part of either Rochester or the Escrow Agent is necessary to
authorize this Agreement and the performance of such transactions.
This Agreement has been duly executed and delivered by each party
hereto and, assuming due authorization, execution and delivery by
each other party hereto, constitutes the legal, valid and binding
agreement of such party enforceable against it or him in accordance
with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
limiting creditors' rights generally or by equitable principles
relating to enforceability.
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(c) Neither execution and delivery of this Agreement nor
the performance by each party hereto of the transactions
contemplated hereby will (i) in the case of Rochester and the
Escrow Agent, violate or conflict with any of the provisions of the
certificate of incorporation or by-laws of such party or, (ii) in
the case of Rochester and the Sellers' Representative, with or
without the giving of notice or the lapse of time or both, violate
or constitute a default under or result in the acceleration of or
entitle any party to accelerate (whether after the giving of notice
or lapse of time or both) any obligation under any mortgage,
indenture, deed of trust, lease, contract, agreement, license or
other instrument or any provision of any law, order, judgment,
decree, restriction or ruling of any governmental authority to
which such party is a party or by which any of its property is
bound.
(d) In the case of Rochester and the Sellers'
Representative, the execution, delivery and performance of this
Agreement by such party and the consummation by such party of the
transactions contemplated by this Agreement will not require the
consent, approval or authorization of any governmental or
regulatory authority or any other Person under any license,
agreement, indenture or other instrument to which such party is a
party or to which any of its properties is subject, and no
declaration, filing or registration with any governmental or
regulatory authority is required in connection with such
transactions, except for any consents, approvals, authorizations,
declarations, filings or registrations that have not been obtained
or made and will not, either individually or in the aggregate,
materially adversely affect the ability of such party to consummate
the transactions contemplated hereby or otherwise perform its
obligations hereunder.
6. Termination of this Agreement.
This Escrow Agreement shall terminate upon the distribution by
the Escrow Agent of all of the Shares and cash then held in the
Escrow Fund, including any interest accrued thereon through the
date of such distribution pursuant to Section 3 hereof.
7. Notices.
All notices and other communications given or made pursuant to
this Agreement (other than distributions from the Escrow Fund to
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the Sellers which shall be made in accordance with the written
instructions made by the Sellers' Representative pursuant to
Section 3.2 hereof) shall be in writing and personally delivered or
sent by nationally recognized overnight courier or by telecopy to
the parties at the following addresses:
(a) If to the Escrow Agent:
(b) If to either of the Sellers in connection with an Article
XI Notice of Claim, to the Sellers' Representative:
with a copy to:
(c) If to Rochester:
with a copy to:
or to such other person or address as any party shall specify by
notice in writing to each of the other parties. All such notices,
requests, demands, waivers and communications shall be deemed to
have been received by the relevant party on the date of personal
delivery to such party's address, addressed to the attention of the
appropriate person specified above, on the business day following
the date on which such notice was sent by overnight courier to such
party's address, addressed to the attention of the appropriate
person specified above or, if such notice is sent by telecopy, on
the date that such telecopy is confirmed as being received by the
recipient. Any notice to an Executive in connection with a Section
5 Notice of Claim shall be delivered to such Executive in
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accordance with the notice provisions of his Employment and Non-
Compete Agreement.
8. Sellers' Representative.
In the event that, subsequent to the execution of this
Agreement, Simon is unable or unwilling to serve as the Sellers'
Representative, he may resign by giving 30 days' prior written
notice of resignation to the Escrow Agent, Rochester and the other
Seller, and, subject to the last proviso of this Section 8, such
resignation shall be effective from the date specified in such
notice. Thereafter Weinert shall serve as Sellers' Representative
under this Agreement unless he is unable or unwilling to do so, in
which event the Sellers shall designate another successor Sellers'
Representative, provided, however, that either Simon or Weinert
shall serve as Sellers' Representative hereunder until such
successor is so designated.
9. Creditors.
No creditor of Rochester, the Sellers' Representative or the
Sellers shall have any rights in or to the Escrow Fund so long as
it remains subject to the terms of this Agreement.
10. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to
contracts made and to be performed entirely within such State.
11. Headings.
The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
12. Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which
together shall constitute a single document. It shall not be
necessary that any counterpart be signed by all of the parties
hereto.
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13. No Assignments.
This Agreement shall be binding upon and inure solely to the
benefit of the parties hereto and their respective successors and
assigns, heirs, administrators and representatives and shall not be
enforceable by or inure the benefit of any third party except as
provided in Sections 4 and 8 hereof with respect to a resignation
by the Escrow Agent and the Sellers' Representative. No party may
assign any of its rights or obligations under this Agreement
without the prior written consent of the other parties.
14. Amendments.
This Agreement may be amended or modified only by a writing
signed by all of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
Rochester Telephone Corporation Escrow Agent:
By: By:
-------------------------- -------------------------
John K. Purcell Name:
Corporate Vice President -----------------------
Title:
----------------------
STEVEN C. SIMON JAMES J. WEINERT
- ------------------------- ---------------------------
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STATE OF NEW YORK )
COUNTY OF MONROE ) ss:
On , 1994, before me personally came John K.
Purcell, to me known, who, being by me duly sworn, did depose and
say that deponent is the Corporate Vice President Rochester
Telephone Corporation, the corporation described in and which
executed the foregoing Agreement; that deponent has executed the
Agreement by order of the Board of Directors of such corporation.
------------------------------
Notary Public
STATE OF )
COUNTY OF ) ss:
On , 1994, before me personally came
, to me known, who, being by me duly sworn, did depose and say
that deponent is the of
, the corporation described in and which executed
the foregoing Agreement; that deponent has executed the Agreement
by order of the Board of Directors of such corporation.
--------------------------------
Notary Public
STATE OF , COUNTY OF ) ss:
On , 1994, before me personally came Steven C.
Simon to me known to be the individual described in, and who
executed the foregoing Agreement, and acknowledged that he executed
the same.
--------------------------------
Notary Public
STATE OF , COUNTY OF ) ss:
On , 1994, before me personally came James Weinert
to me known to be the individual described in, and who executed the
foregoing Agreement, and acknowledged that he executed the same.
--------------------------------
Notary Public
