SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 13, 1997
INTERNATIONAL FIBERCOM, INC.
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(Exact name of registrant as specified in its charter)
Arizona
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(State or other jurisdiction of incorporation)
1-9690 86-0271282
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(Commission File Number) (IRS Employer Identification Number)
3615 South 28th Street, Phoenix, Arizona 85040
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (602) 941-1900
Not Applicable
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(Former name or former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
(a) Effective October 31, 1996, International FiberCom, Inc. (the
"Company") acquired Concepts in Communications, Inc., a Tennessee corporation,
("CIC") for $4,800,000 from its two shareholders. The Company paid $1,500,000 at
the closing, which occurred on February 13, 1997, and the balance is payable in
monthly installments of $1,100,000 in March through May 1997, which balance is
represented by a promissory note bearing interest at the rate of 5% per annum.
The Note is secured by all of the shares of capital stock of CIC which the
Company purchased in the transaction. The Company obtained the funds to complete
the acquisition from the proceeds of a private placement of $1,500,000 principal
amount of 8% of Convertible Subordinated Debentures ("Debentures") and
$4,400,000 of shares of Series B Convertible Preferred Stock ("Preferred Stock")
which were sold in an exempt transaction under Regulation D under the Securities
Act of 1933, as amended (the "Securities Act").
The Debentures are due and payable in full on February 10,
1998 and are convertible into Common Stock commencing October 11, 1997, at a
price of $1.25 per share. The Debentures are subordinated to all Senior
Indebtedness of the Company. The Company has agreed to file a registration
statement respecting the Common Stock issuable upon conversion of the Debentures
under the Securities Act on or before April 11, 1997.
The Preferred Stock will be issued in four tranches of
$1,100,000 each on or before the 15th day of March, April, May and June 1997, at
which points payments for the shares of Preferred Stock are due and payable. The
Preferred Stock is convertible into Common Stock at a price equal to the lower
of the Average Stock Price on the date of each monthly subscription or the
Discounted Average Stock Price on the date of conversion. The "Average Stock
Price" is the average of the daily closing bid prices of the Common Stock for
the five consecutive trading days immediately preceding the relevant date. The
"Discounted Average Stock Price" is (i) 70% of the average of the daily closing
bid prices of the Common Stock for the five consecutive trading days immediately
preceding the date of conversion into Common Stock if the average of the daily
bid prices is at or below $3.00 per share or (ii) 75% of the average of such
daily closing bid prices if the average is above $3.00 per share. For a one-year
period after the issuance of the Preferred Stock, the Conversion Price of the
Common Stock will not be less than 50% of the Average Stock Price, but will, in
no event, exceed $.75 per share. There will be no floor on the conversion price
if the Company fails to achieve certain levels of gross profit on a quarterly
basis. Dividends will be payable on the Preferred Stock at the rate of 4% per
annum, payable in shares of Common Stock or cash, at the option of the Company,
on a quarterly basis. The Preferred Stock is redeemable on or after 60 days
after issuance, in whole or in part, at 150% of the purchase price of the
Preferred Stock plus all accrued but unpaid dividends.
The Company also committed to issue 220,000 Common Stock
Purchase Warrants for each of the four tranches upon the funding of each tranche
of the Preferred Stock. The exercise prices range from $2.25 to $3.00 for the
Warrants. The Company has committed to file registration statements or before
April 11, 1997 for first tranche and within 30 days of demand for tranches two
through four, but in any event within 30 days after the Company receives the
final subscription installment for the fourth tranche.
(b) CIC is a Nashville, Tennessee based company which also has
operations in Memphis and Knoxville providing systems integration services,
including design, engineering, installation and maintenance of structured cabled
systems, network hardware and software, work station peripherals and
intercommunication systems, primarily within commercial, industrial and
governmental facilities. These systems, comprised of optical fiber and
unshielded twisted pair copper cable, transmit voice, data and video
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signals. Customers of CIC include Nissan Motor Co., Kimberly Clark Corp., Nike
Corp., Columbia/HCA Healthcare Corp., Autozone, The Trane Co., Caterpillar
Financial Services, Ingram Micro, the State of Tennessee, Vanderbilt University
Medical Center and Thomas Hospital.
Item 7. Financial Statements and Exhibits
(a) The Financial Statements of Business Acquired. The financial
statements of CIC are currently being audited and are not available at this
time. The financial statements will be filed not later than 60 days after the
date of this report.
(b) Pro forma Financial Information. See (a) above.
(c) Exhibits.
1. Stock Purchase Agreement, dated as of October 31, 1996, and
as amended on January 17, 1997 by and among CIC, Cherokee Equity Corporation, a
Tennessee corporation, H. Ray Tucker and the Company. (Exhibits and Schedules
omitted).
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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 by the
undersigned hereunto duly authorized.
INTERNATIONAL FIBERCOM, INC.
/s/ Joseph P. Kealy
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Joseph P. Kealy
President
Dated: March 10, 1997
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made and entered into as of this 31st
day of October, 1996, by and among International FiberCom, Inc., a corporation
incorporated under the laws of the State of Arizona ("Purchaser") and Concepts
in Communications, Inc., a corporation incorporated under the laws of the State
of Tennessee ("CIC"), Cherokee Equity Corporation ("Cherokee"), a corporation
incorporated under the laws of the State of Tennessee, and H. Ray Tucker
("Tucker"). Cherokee and Tucker are collectively referred to as the "Selling
Shareholders."
W I T N E S S E T H :
WHEREAS, the Purchaser desires to acquire all of the shares of capital
stock of CIC owned by the Selling Shareholders on the terms and conditions set
forth in this Agreement; and
WHEREAS, CIC and the Selling Shareholders deem it advisable and for
their benefit to sell their capital stock of CIC to the Purchaser on the terms
and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements and
covenants contained herein, the parties hereto, intending to be legally bound
hereby, agree as follows:
ARTICLE 1
Definitions
For all purposes of this Agreement:
1.1 "CIC Financial Statements" means the audited balance sheets and
income statements of CIC for the fiscal years ended December 31, 1993, 1994 and
1995 and the unaudited balance sheet and income statement of CIC for the nine
months ended September 30, 1996.
1.2 "CIC Shares" means shares of common stock of CIC, no par value per
share.
1.3 "Disclosure Schedule" means the compilation of informational
schedules required to be delivered by the parties under this Agreement.
1.4 "Fiscal Year" means the period from January 1 through December 31
for each year referenced.
ARTICLE 2
Purchase and Sale
2.1 Purchase and Sale. Upon the terms and subject to the conditions
contained herein, the Selling Shareholders agree to sell, assign, transfer and
deliver to the Purchaser, and the Purchaser agrees to purchase from each Selling
Shareholder, five hundred (500) CIC Shares, for a total of one thousand (1,000)
CIC Shares. The certificates represented by the CIC Shares shall be endorsed in
blank, or accompanied by stock powers duly executed in blank, by each Selling
Shareholder transferring all of the CIC Shares owned by such Selling
Shareholder. Each Selling Shareholder agrees to cure any deficiencies with
respect to the endorsement of the certificates representing the CIC Shares owned
by such Selling
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Shareholder or with respect to the stock power accompanying any such
certificates at any time subsequent to the closing of the transaction. The CIC
Shares sold under this Agreement represent all of the issued and outstanding
capital stock of CIC. The foregoing purchase and sale shall take place at a
closing ("Closing") to be held at the offices of Farris, Warfield & Kanaday,
SunTrust Center, 424 Church Street, Suite 1900, Nashville, Tennessee, or such
other place mutually acceptable to the Selling Shareholders and the Purchaser,
on the date established pursuant to Article 8, "Closing" ("Closing Date").
2.2 Purchase Price and Payment for CIC Shares. In full consideration
for the purchase by the Purchaser of the CIC Shares of the Selling Shareholders,
the Purchaser shall pay the Selling Shareholders the sum of Four Million Eight
Hundred Thousand and No/100 Dollars ($4,800,000) in cash on the Closing Date,
subject to any adjustment as set forth in this Section 2.2 ("Purchase Price")
and the escrow established by Section 2.4, "Escrow of Portion of Purchase
Price." The Purchase Price is subject to reduction if the net income ("Net
Income") of CIC for the fiscal year ended December 31, 1996 ("Fiscal 1996"), as
calculated in accordance with generally accepted accounting principles and
audited by Lattimore Black Morgan & Cain, P.A., Nashville, Tennessee,
independent certified public accountants, is less than $500,000. The amount of
the reduction in the Purchase Price will be the amount by which the actual Net
Income for Fiscal 1996 is less than $500,000 multiplied by 9.6.
2.3 Financial Statements and Income Tax Returns. The parties
contemplate that (i) after the Closing the Purchaser will own one thousand
(1,000) CIC Shares, which is one hundred percent (100%) of the issued and
outstanding capital stock of CIC and (ii) CIC, as a new subsidiary of the
Purchaser's consolidated group, will include its financial results in the
Purchaser's consolidated financial statements covering the periods after joining
the Purchaser's consolidated group.
2.4 Escrow of Portion of Purchase Price. On the Closing Date, Purchaser
will escrow $400,000 of the Purchase Price with an escrow agent ("Escrow Agent")
specified in and under the terms of the Escrow Agreement attached as Exhibit
2.4, pending the Purchaser's receipt of audited financial statements of CIC for
Fiscal 1996 to verify the Net Income. The Escrow Agreement will be in a form
mutually acceptable to the Selling Shareholders and the Purchaser and be
executed by the parties on or before December 16, 1996. Upon such verification,
the Escrow Agent shall promptly pay the balance of the Purchase Price
representing the difference between that portion of the Purchase Price already
paid according to the purchase formula set forth in Section 2.2, "Purchase Price
and Payment for CIC Shares," and the amount owed under such formula based upon
the Net Income for Fiscal 1996.
ARTICLE 3
Representations and Warranties of the Purchaser
The Purchaser represents and warrants to the Selling Shareholders as
follows:
3.1 Authority. The Purchaser's execution, delivery and performance of
this Agreement have been duly authorized by its Board of Directors. This
Agreement is valid and binding upon Purchaser and is enforceable against
Purchaser in accordance with its terms, subject to bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium, receivership or other similar
laws relating to or affecting creditors' rights generally.
3.2 Validity of Agreement. Neither the execution nor the delivery of
this Agreement by the Purchaser, nor the performance by the Purchaser of any of
the respective covenants or obligations to be
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performed by the Purchaser hereunder will result in any violation of any order,
decree or judgment of any court or other governmental body, or statute or law
applicable to the Purchaser, or in any breach of any terms or provisions of the
Purchaser's Articles of Incorporation or Bylaws, or constitute a default under
any indenture, mortgage, deed of trust or other contract to which the Purchaser
is a party or by which the Purchaser is bound.
3.3 Government Approvals. To the knowledge of the Purchaser, no
consent, approval or authorization of, or notification to or registration with,
any governmental authority, either federal, state or local, is required in
connection with the execution, delivery and performance of this Agreement by the
Purchaser.
3.4 Organization.
3.4.1 The Purchaser is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Arizona,
and has full corporate power and authority to carry on its business as now being
conducted and to execute, deliver and perform its obligations under this
Agreement.
3.4.2 The Purchaser is a publicly held company and is a
reporting company under the Securities Exchange Act of 1934, as amended
("Exchange Act"). All reports due under the Exchange Act have been filed as of
the date of this Agreement and are true, correct and complete in all material
respects.
3.5 Financial Statements and Public Reports. To the knowledge of the
Purchaser, the audited consolidated financial statements of the Purchaser for
the years ended December 31, 1995 and 1994, with accompanying notes, all as
contained in the Purchaser's Annual Report on Form 10-KSB, and the financial
statements contained in the Purchaser's Report on Form 10-QSB for the nine
months ended September 30, 1996, delivered to the Selling Shareholders and CIC,
fairly and accurately present, in all material respects, the financial position
of the Purchaser at such dates, the results of its operation and changes in its
financial position for the periods and years ended on such dates, in conformity
with accounting generally accepted accounting principles consistently applied.
To the knowledge of the Purchaser, such financial statements will contain and
reflect all necessary adjustments for a fair and accurate presentation of the
financial condition as of the date of such statements.
3.6 Securities Laws. The Purchaser is purchasing the CIC Shares for its
own account and for investment, with no present intention of dividing its
interest with others or of reselling or otherwise disposing of all or any
portion of the CIC Shares. The Purchaser does not intend to make any sale of the
CIC Shares, either currently or after the passage of a fixed or determinable
period of time or upon the occurrence or non-occurrence of any predetermined
event or circumstance. The Purchaser has no present or contemplated agreement,
undertaking, arrangement, obligation, indebtedness or commitment providing for,
or which is likely to compel, a disposition of the CIC Shares. The Purchaser is
not aware of any circumstances presently in existence which are likely in the
future to prompt a disposition of the CIC Shares. The Purchaser possesses the
experience in business in which CIC is involved necessary to make an informed
decision to acquire the CIC Shares and the Purchaser has the financial means to
bear the economic risk of the investment in the CIC Shares as of the Closing
Date.
3.7 Subsidiaries. The Purchaser has one subsidiary as of the date of
this Agreement: Kleven Construction, Inc., an Arizona corporation. The Purchaser
owns 100% of the outstanding capital stock of such corporation.
3.8 Broker's or Finder's Fees. No agent, broker, person or firm acting
on behalf of the Purchaser is, or will be, entitled to any commission or
broker's or finder's fees from any of the parties to
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this Agreement, or from any person controlling, controlled by or under common
control with any of the parties to this Agreement, in connection with any of the
transactions contemplated in this Agreement.
3.9 Completeness of Representations and Schedules. The Schedules hereto
completely and correctly present in all material respects the information
required by this Agreement. This Agreement, the certificates to be delivered by
the officers of the Purchaser at the Closing, any Schedules to be delivered
under this Agreement and the representations and warranties of this Article 3,
and the documents and written information pertaining to the Purchaser furnished
to CIC or its agents and the Selling Shareholders by or on behalf of the
Purchaser, do not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make this Agreement, or such
certificates, schedules, documents or written information, not misleading.
ARTICLE 4
Representations and Warranties of the Selling Shareholders
Except as disclosed on the Disclosure Schedule delivered by the Selling
Shareholders to the Purchaser by December 4, 1996 and subsequently disclosed in
the Supplemental Disclosure Schedule to be delivered by the Selling Shareholders
to the Purchaser on the Closing Date, the Selling Shareholders, jointly and
severally, hereby represent and warrant to the Purchaser as of the date hereof
and as of the Closing Date as follows:
4.1 Validity of Agreement. This Agreement is valid and binding upon the
Selling Shareholders and CIC, and, to the knowledge of the Selling Shareholders,
neither the execution nor delivery of this Agreement by such parties nor the
performance by such parties of any of their covenants or obligations hereunder
will constitute a material default under any contract, agreement or obligation
to which any of them is a party or by which they or any of their respective
properties are bound. This Agreement is enforceable severally against the
Selling Shareholders and CIC in accordance with its terms, subject to
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium,
receivership or other similar laws relating to or affecting creditors' rights
generally.
4.2 Governmental Approvals. To the knowledge of the Selling
Shareholders, no consent, approval or authorization of, or notification to or
registration with, any governmental authority, either federal, state or local,
is required in connection with the execution, delivery and performance of this
Agreement by the Selling Shareholders or CIC.
4.3 Title and Exclusive Dealing.
4.3.1 Each Selling Shareholder has full right and title to
five hundred (500) CIC Shares and such CIC Shares constitute all the CIC Shares
which each Selling Shareholder, directly or indirectly, owns. Each Selling
Shareholder holds his or its CIC Shares free and clear of all liens,
encumbrances, restrictions and claims of every kind. Each Selling Shareholder
has the legal right, power and authority to enter into this Agreement and to
sell, assign, transfer and convey the CIC Shares so owned by him or it pursuant
to this Agreement and the delivery to the Purchaser of the CIC Shares pursuant
to the provisions of this Agreement will transfer to the Purchaser valid title
thereto, free and clear of all liens, encumbrances, restrictions and claims of
every kind. There are no outstanding options, warrants, rights, calls,
commitments, conversion rights, rights of exchange, plans or other agreements of
any character providing for the purchase or sale of any CIC Shares by any
Selling Shareholder; and
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4.3.2 The Selling Shareholders are not engaged in any
discussions or negotiations for the purchase or sale of any CIC Shares except
those discussions with the Purchaser which are embodied in this Agreement. CIC
is not engaged in any discussions or negotiations for the sale of any CIC Shares
or CIC Shares held in the treasury, except those discussions with the Purchaser
which are embodied in this Agreement.
4.4 Organization and Good Standing. CIC is a corporation duly organized
and existing in good standing under the laws of the State of Tennessee. CIC has
full corporate power and authority to carry on its business as now conducted and
to own or lease and operate the properties and assets now owned or leased and
operated by it. CIC is duly qualified to transact business in the state of
Tennessee and in all states and jurisdictions in which the business or ownership
of its property makes it necessary so to qualify (other than jurisdictions in
which the nature of the property owned or business conducted, when considered in
relation to the absence of serious penalties, renders qualification as a foreign
corporation unnecessary as a practical matter).
4.5 Capitalization. The authorized capital stock of CIC consists solely
of 2,000 shares of Common Stock, no par value per share, of which one thousand
(1,000) CIC Shares are issued and outstanding. The CIC Shares are validly
issued, are fully paid and non-assessable and are subject to no restrictions on
transfer. The CIC Shares shown as outstanding constitute the only outstanding
shares of the capital stock of CIC of any nature whatsoever, voting and
non-voting. All CIC Shares are required to be certificated, and CIC has executed
and delivered no certificates for shares in excess of the number of CIC Shares
set forth above. There are, and at Closing will be, no outstanding options,
warrants, rights, calls, commitments, conversion rights, plans or other
agreements of any character providing for the purchase, issuance or sale of, or
any securities convertible into, capital stock of CIC, whether issued, unissued
or held in its treasury.
4.6 Authority.
4.6.1 The execution, delivery and performance of this
Agreement by CIC have been duly authorized by its Board of Directors. This
Agreement is valid and binding upon CIC, and is enforceable against CIC in
accordance with its terms, subject to bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium, receivership or other similar laws relating
to or affecting creditors' rights generally. The execution, delivery and
performance of this Agreement by CIC will not result in the violation or breach
of any term or provision of charter instruments applicable to CIC or, to the
knowledge of the Selling Shareholders, constitute a material default under any
indenture, mortgage, deed of trust or other contract or agreement to which CIC
is a party or by which CIC or any of its properties is bound or, to the
knowledge of the Selling Shareholders, will not cause the creation of a lien or
encumbrance on any properties owned by or leased to or by CIC.
4.6.2 The execution, delivery and performance of this
Agreement by Cherokee has been duly authorized by its Board of Directors. This
Agreement is valid and binding upon Cherokee, and is enforceable against
Cherokee in accordance with its terms, subject to bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium, receivership or other similar
laws relating to or affecting creditors' rights generally. The execution,
delivery and performance of this Agreement by Cherokee will not result in the
violation or breach of any term or provision of charter instruments applicable
to Cherokee or, to the knowledge of Cherokee, constitute a material default
under any indenture, mortgage, deed of trust or other contract or agreement to
which Cherokee is a party that may effect the ability of Cherokee to perform
under this Agreement.
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4.7 No Subsidiaries. CIC has no subsidiaries and does not own five
percent (5%) or more of the securities having voting power of any corporation
(or would own such securities in such amount upon the closing of any existing
purchase obligations for securities).
4.8 Financial Statements. To the knowledge of the Selling Shareholders,
the CIC Financial Statements which have been provided to the Purchaser (i) have
been prepared from the books and records of CIC, (ii) fairly and accurately
present, in all material respects, the financial condition of CIC as of the date
thereof in conformity with generally accepted accounting principles consistently
applied, and (iii) contain and reflect all necessary adjustments for a fair and
accurate presentation of the financial condition as of such date. Except as and
to the extent reflected or reserved against in such CIC Financial Statements, or
otherwise expressly disclosed therein, or except as disclosed in Section 4.8 of
the Disclosure Schedule, to the knowledge of the Selling Shareholders, CIC has
no liabilities or obligations, contingent or otherwise, of a nature required to
be reflected in the CIC Financial Statements in accordance with generally
accepted accounting principles.
4.9 Absence of Certain Changes. During the period from December 31,
1995 through and including the Closing Date, CIC has not:
4.9.1 To the knowledge of the Selling Shareholders, suffered
any material change adversely affecting its assets, liabilities, financial
condition or business;
4.9.2 Made any change in the compensation payable or to become
payable to any of its employees or agents, or made any bonus payments or
compensation arrangements to or with any of its employees or agents except as
set forth on Schedule 4.9.2 of the Disclosure Schedule;
4.9.3 Paid or declared any dividends or distributed any of its
assets of any kind whatsoever to any of its shareholders;
4.9.4 Issued any stock, or granted any stock options or
warrants to purchase stock;
4.9.5 Sold or transferred any of its assets or canceled any
indebtedness or claims owing to it, except in the ordinary course of business
and consistent with its past practices;
4.9.6 Sold, assigned or transferred any formulas, inventions,
patents, patent applications, trademarks, trade names, copyrights, licenses,
computer programs or software, know-how or other intangible assets;
4.9.7 To the knowledge of the Selling Shareholders, amended or
terminated any contract, agreement or license to which it is a party otherwise
than in the ordinary course of business or as may be necessary or appropriate
for the consummation of the transactions described herein;
4.9.8 Borrowed any money or incurred, directly or indirectly
(as a guarantor or otherwise), any indebtedness in excess of $10,000, except in
the ordinary course of business and consistent with its past practices;
4.9.9 Discharged or satisfied any lien or encumbrance or paid
any obligation or liability (absolute or contingent), other than current
liabilities shown in the CIC Financial Statements or current liabilities
incurred since such date in the ordinary course of business, consistent with its
past practices;
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4.9.10 Mortgaged, pledged or subjected to lien, charge or
other encumbrance any of its assets, except in the ordinary course of business
and consistent with its past practices; or
4.9.11 To the knowledge of the Selling Shareholders, entered
into or committed to any transaction other than transactions in the ordinary
course of business, consistent with past practices.
4.10 Documents. Set forth in Section 4.10 of the Disclosure Schedule is
a complete list of all material documents to which CIC is a party. All such
documents listed on and attached to Section 4.10 of the Disclosure Schedule are,
to the knowledge of the Selling Shareholders, valid, enforceable and accurate
and complete copies of such material documents (or, with the consent of the
Purchaser, forms thereof) as have been requested by the Purchaser have been
provided to the Purchaser. Except as disclosed in Section 4.10 of the Disclosure
Schedule, to the knowledge of the Selling Shareholders, CIC is not or will not
be, merely with the passage of time, in default under any such material
document. Except as specified in Section 4.10 of the Disclosure Schedule, to the
knowledge of the Selling Shareholders, there is no requirement for any of such
material documents to be novated or to have the consent of the other contracting
party in order for such material documents to be valid, effective and
enforceable by CIC after the Closing as it was immediately prior thereto.
4.11 Title to Properties and Assets. CIC presently owns or leases real
property from which it conducts its business and owns or leases certain personal
property. Disclosed in Section 4.11 of the Disclosure Schedule are the titles or
leases pertaining to such property. CIC has good and marketable title to all
real property or tangible personal property reflected on its books and records
as owned by it, free and clear of all liens and encumbrances, except (i) liens
for current taxes; (ii) other liens or encumbrances that do not materially
impair the use of the property subject thereto; and (iii) those liens or
encumbrances reflected on the CIC Financial Statements. Such improved real
property or tangible personal property is in satisfactory condition and suitable
for the purpose for which it is being used, subject in each case to consumption
in the ordinary course, ordinary wear and tear and ordinary repair, maintenance
and periodic replacement.
4.12 Absence of Pension Liability. Except as described in Section 4.12
of the Disclosure Schedule, CIC has no liability of any nature to any person or
entity for pension or retirement obligations, vested or unvested, to or for the
benefit of any of its existing or former employees. The consummation of the
transactions contemplated by this Agreement will not entitle any employee of CIC
to severance pay, unemployment compensation or any other payment, except as
expressly provided in this Agreement, including the Exhibits, or accelerate the
time of payment or increase the amount of compensation due to any such employee.
Except as described in Section 4.12 of the Disclosure Schedule, CIC presently
has no employee benefit plans and has no announced plan or legally binding
commitment to create any employee benefit plans.
4.13 Tax Returns. To the knowledge of the Selling Shareholders, CIC
(and any predecessor corporation or partnership as to which either of them is
the transferee or successor) has timely filed, or has timely secured an
extension and will (within the permitted extension) file, all tax returns,
including federal, state, local and foreign tax returns, tax reports and forms,
as to which the due date for filing is prior to the Closing Date; has reported
all reportable income on such returns; has adopted and followed in the
preparation of such returns methods of accounting accepted by law, and has not
changed any methods of accounting without compliance with procedures required by
law; has not deducted any expenses or charges or claimed any credits which are
not allowable; and except as set forth in Section 4.13 of the Disclosure
Schedule, has paid, or accrued and reserved for, all taxes, penalties and
interest shown to be due or required to be paid pursuant to the returns as
filed, or as adjusted pursuant to amendment or correction.
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The Selling Shareholders have no knowledge of any claim for taxes, penalties or
interest thereon in addition to those which have been paid for or for which
accrual has been made.
4.14 Filings. CIC has made all filings and reports required under all
local, state and federal laws with respect to its business and of any
predecessor entity or partnership, except filings and reports in those
jurisdictions in which the nature of the property owned or business conducted,
when considered in relation to the absence of serious penalties, renders the
required filings or reports unnecessary as a practical matter.
4.15 Litigation. Except as described in Section 4.15 of the Disclosure
Schedule, there are no lawsuits, arbitration actions or other proceedings
(equitable, legal, administrative or otherwise) pending or, to the knowledge of
the Selling Shareholders, threatened, and there are no investigations pending or
to the knowledge of the Selling Shareholders, threatened against CIC which
relate to and could have a material adverse effect on the properties, businesses
or assets of CIC or which could adversely affect the validity or enforceability
of this Agreement or the obligation or ability of the Selling Shareholders or
CIC to perform their respective obligations under this Agreement or to carry out
the transactions contemplated by this Agreement.
4.16 Compliance With Laws. To the knowledge of the Selling
Shareholders, CIC has conducted and is continuing to conduct its business in
material compliance with, and is in material compliance with, all applicable
statutes, orders, rules and regulations promulgated by governmental authorities
relating in any material respect to its operations, conduct of business or use
of properties, including, without limitation, any applicable statute, order,
rule or regulation relating to (i) wages, hours, hiring, nondiscrimination,
retirement, benefits, pensions, working conditions, and worker safety and
health; (ii) air, water, toxic substances, noise, or solid, gaseous or liquid
waste generation, handling, storage, disposal or transportation; (iii) zoning
and building codes; (iv) the production, storage, processing, advertising, sale,
distribution, transportation, disposal, use and warranty of products; or (v)
trade and antitrust regulations. To the knowledge of the Selling Shareholders,
the execution, delivery and performance of this Agreement by the Selling
Shareholders and CIC and the consummation by the Selling Shareholders and CIC of
the transactions contemplated by this Agreement will not, separately or jointly,
violate, contravene or constitute a default under any applicable statutes,
orders, rules and regulations promulgated by governmental authorities or cause a
lien on any property used, owned or leased by CIC to be created thereunder. To
the knowledge of the Selling Shareholders, there are no proposed changes in any
applicable statutes, orders, rules and regulations promulgated by governmental
authorities that would cause any representation or warranty contained in this
Section 4.16 to be untrue and have a material adverse effect on its operations,
conduct of business or use of properties.
4.17 Intellectual Properties. CIC has no interest in and owns no
domestic and foreign letters, patent, patents, patent applications, patent
licenses, software licenses and know how licenses, trade names, trademarks,
copyrights, unpatented inventions, service mark registrations and applications
and copyright registrations and applications owned or used by CIC in the
operation of its business (collectively, the "Intellectual Property").
4.18 Accounts Receivable. To the knowledge of the Selling Shareholders,
the amount of all accounts receivable, unbilled invoices and other debts due as
recorded in the records and books of account of CIC as being due to CIC as of
the Closing Date (less the amount of any provision or reserve therefor made in
the records and books of the account of CIC) will be good and collectible in
full in the ordinary course of business and in any event not later than ninety
(90) days after the Closing Date; and none of such accounts receivable or other
debts is or will at the Closing Date be subject to any counterclaim or set-off
except to the extent of any such provision or reserve. To the knowledge of the
Selling Shareholders, there
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has been no material adverse change since September 30, 1996 in the amount of
accounts receivable or other debts due CIC or the allowances with respect
thereto, or accounts payable of CIC from that reflected in the CIC Financial
Statements.
4.19 Employment Relations. To the knowledge of the Selling
Shareholders: CIC is in compliance with all Federal, state or other applicable
laws, domestic or foreign, respecting employment and employment practices, terms
and conditions of employment and wages and hours, and has not and is not engaged
in any unfair labor practice which would result in a material adverse effect on
CIC; no unfair labor practice complaint against CIC is pending before the
National Labor Relations Board; there is no labor strike, dispute, slow down or
stoppage actually pending or threatened against or involving CIC; no labor
representation question exists respecting the employees of CIC; no grievance
which might have an adverse effect upon CIC or the conduct of its business
exists; no arbitration proceeding arising out of or under any collective
bargaining agreement is currently being negotiated by CIC; and CIC has not
experienced any material labor difficulty during the last three (3) years.
4.20 Interests in Clients, Suppliers, Etc. As of the Closing Date, none
of the Selling Shareholders and no officer or director of CIC owns or possesses,
directly or indirectly, any financial interest in, or is a director, officer or
employee of, any corporation, firm, association or business organization which
is engaged in the same or similar business of CIC, or is a competitor or
potential competitor of CIC or any of its subsidiaries, except as disclosed in
Section 4.20 of the Disclosure Schedule. Ownership of securities of a company
whose securities are registered under the Securities Exchange Act of 1933, as
amended ("Securities Act") not in excess of 5% of any class of such securities,
shall not be deemed to be a financial interest for purposes of this Section
4.20.
4.21 Bank Accounts, Powers of Attorney and Compensation of Employees.
Set forth in Section 4.21 of the Disclosure Schedule is an accurate and complete
list showing (a) the name and address of each bank in which CIC and any
subsidiary has an account or safe deposit box, the number of any such account or
any such box and the names and all persons authorized to draw thereon or to have
access thereto, (b) the names of all persons, if any, holding powers of attorney
from CIC and a summary statement of the terms thereof, and (c) the names of all
persons whose compensation from CIC and/or any subsidiary for the 1996 Fiscal
Year exceeds an annualized rate of $50,000.00, together with a statement of the
full amount paid or payable to each such person for services rendered during the
1996 Fiscal Year.
4.22 Certain Activities. To the knowledge of the Selling Shareholders,
CIC has not, directly or indirectly, engaged in or been a party to any of the
following activities:
4.22.1 Bribes, kickbacks or gratuities to any person or
entity, including domestic or foreign government officials or any other payments
to any such persons or entity, whether legal or not legal, to obtain or retain
business or to receive favorable treatment of any nature with regard to business
(excluding commissions or gratuities paid or given in full compliance with
applicable law and constituting ordinary and necessary expenses incurred in
carrying on its business in the ordinary course);
4.22.2 Contributions (including gifts), whether legal or not
legal, made to any domestic or foreign political party, political candidate or
holder of political office;
4.22.3 Holding of or participation in bank accounts, funds or
pools of funds created or maintained in the United States or any foreign
country, without being reflected on the corporate books of account, or as to
which receipts or disbursements therefrom have not been reflected on such books,
the purpose of which is to obtain or retain business or to receive favorable
treatment with regard to business;
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4.22.4 Receiving or disbursing monies, the actual nature of
which has been improperly disguised or intentionally misrecorded on or
improperly omitted from the corporate books of account;
4.22.5 Paying fees to domestic or foreign consultants or
commercial agents which exceed the reasonable value of the ordinary and
customary consulting and agency services purported to have been rendered;
4.22.6 Paying or reimbursing (including gifts) personnel of
CIC for the purpose of enabling them to expend time or to make contributions or
payments of the kind or for the purposes referred to in Sections 4.22.1 through
4.22.5 above;
4.22.7 Participating in any manner in any activity which is
illegal under the international boycott provisions of the Export Administration
Act, as amended, or the international boycott provisions of the Internal Revenue
Code, or guidelines or regulations thereunder; and
4.22.8 Making or permitting unlawful charges, mischarges or
defective or fraudulent pricing under any contract or subcontract under a
contract with any department, agency or subdivision thereof, of the United
States government, state or municipal government or foreign government.
4.23 Insurance Coverage. The policies of fire, liability or other forms
of insurance of CIC are described in Section 4.23 of the Disclosure Schedule.
4.24 Charter and By-Laws. CIC has heretofore delivered to the Purchaser
true, accurate and complete copies of the Charter and By-Laws of CIC, together
with all amendments to each of the same as of the date hereof.
4.25 Corporate Minutes. The minute books of CIC delivered to the
Purchaser at the Closing are the correct and only such minute books and do and
will contain complete and accurate records of any and all proceedings and
actions at all meetings, including written consents executed in lieu of meetings
of its shareholders, Board of Directors and committees thereof through the
Closing Date. The stock records of CIC delivered to the Purchaser at the Closing
are the correct and only such stock records and accurately reflects all issues
and transfers of record of the capital stock of such corporation.
4.26 Default on Indebtedness. CIC is not in monetary default or, to the
knowledge of the Selling Shareholders, in material default in any other respect
under any evidence of indebtedness for borrowed money.
4.27 Indebtedness. Except as described in Section 4.27 of the
Disclosure Schedule, the Selling Shareholders and any corporation or entity with
which they are affiliated are not indebted to CIC, and (ii) CIC has no
indebtedness or liability to the Selling Shareholders and any corporation or
entity with which they are affiliated.
4.28 Broker's or Finder's Fees. No agent, broker, person or firm acting
on behalf of the Selling Shareholders or CIC is, or will be, entitled to any
commission or broker's or finder's fees from any of the parties hereto, or from
any person controlling, controlled by or under common control with any of the
parties hereto, in connection with any of the transactions contemplated herein.
4.29 Agreements, Judgment and Decrees Affecting CIC and the Selling
Shareholders. CIC and the Selling Shareholders jointly and severally represent
and warrant to the Purchaser that each such Selling Shareholder and CIC are not
subject to any agreement, judgment or decree adversely affecting his
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or its ability to enter into this Agreement, to consummate the transactions
contemplated herein, or, in the case of Tucker, to act as a consultant of CIC
after Closing.
4.30 Completeness of Representations and Schedules. The Schedules
hereto, where applicable to the Selling Shareholders and CIC, completely and
correctly present in all material respects the information required by this
Agreement. This Agreement, the certificates to be delivered by CIC and the
Selling Shareholders at the Closing, the Schedules and the representations and
warranties contained in this Article 4, and the documents and written
information pertaining to CIC furnished to the Purchaser or its agents by or on
behalf of the Selling Shareholders or CIC, do not contain any untrue statement
of a material fact or omit to state a material fact necessary in order to make
this Agreement, or such certificates, schedules, documents or written
information not misleading.
ARTICLE 5
Pre-Closing Covenants of the Selling Shareholders and CIC
The Selling Shareholders and CIC independently covenant and agree,
pending the Closing of the transactions contemplated by this Agreement, to
comply with and perform, and hereby independently represent and warrant that,
subject to the provisions of Article 7, "Conditions Precedent to the Obligations
of the Selling Shareholders and CIC," as of the Closing they will have complied
with and performed, the following covenants and undertakings:
5.1 No Distributions to Shareholders. CIC will not pay or declare any
dividend on, or make any other distribution of, any of its assets of any kind
whatsoever to any of its shareholders, or redeem, purchase or otherwise acquire
any of its capital stock.
5.2 Issuance of Capital Stock. CIC will not issue any stock, or grant
any stock options or warrants to purchase stock, or issue any securities
convertible into its capital stock, for consideration or otherwise, except as
provided for in this Agreement.
5.3 Charter and By-Laws. CIC will not amend or alter in any way its
Charter or By-Laws without the prior written consent of the Purchaser.
5.4 Operations of CIC. Except as contemplated by this Agreement, CIC
will conduct its business and operations only in the ordinary course and shall
not enter into any new contracts or assume any new obligations outside of the
ordinary course of business or make any extraordinary capital expenditures
without the written consent of the Purchaser. Without limiting the generality of
the foregoing, and except as contemplated by this Agreement, prior to the
Closing Date, without the prior written consent of the Purchaser, CIC will not
intentionally take any action which would result in a breach of any
representation or warranty contained in Article 4 as if such representations and
warranties were by their terms applicable to such period.
5.5 Termination of Interest in CIC Shares. The Selling Shareholders
shall take such actions as are necessary to ensure that as of the Closing Date
they have full right and title to, and rights to convey, all the issued and
outstanding shares of the capital stock of CIC and there shall be no outstanding
options on, rights to or claims regarding the capital stock of CIC.
5.6 Negotiations with Third Parties. CIC and the Selling Shareholders
will not, prior to Closing or termination per Article 10, "Termination," of this
Agreement, enter into or pursue any
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arrangements or negotiations with any other party relative to the sale or merger
of CIC into any other party or any sale of assets or control relative to any
extraordinary transaction without the consent of the Purchaser.
5.7 Compensation. There shall be no salaries, advances, perquisites or
other forms of compensation, direct or indirect, other than those incurred in
the ordinary and necessary course of business, incurred by CIC prior to or as of
the Closing Date other than those approved by the Purchaser.
ARTICLE 6
Conditions Precedent to Obligations of the Purchaser
The obligations of the Purchaser under this Agreement shall be subject
to the satisfaction, on or prior to the Closing Date (except for Sections 6.1.1
and 6.9) of all of the following conditions, any one or more of which may be
waived by the Purchaser:
6.1 Representations and Warranties Accurate.
6.1.1 The Selling Shareholders and CIC shall deliver the
Disclosure Schedule to this Agreement by December 4, 1996, provided that the
Purchaser may extend the delivery date if additional time is required. The
Purchaser shall have seven (7) days after its receipt of the Disclosure Schedule
to determine, in its sole discretion, whether or not the Purchaser shall accept
the representations and warranties as modified or amplified by the Disclosure
Schedule ("Acceptance Date"). If the Purchaser determines that any part of the
Disclosure Schedule is unacceptable, the Purchaser may provide the Selling
Shareholders and CIC with additional time to remedy the matter or may terminate
this Agreement in accordance with the provisions of Article 10, "Termination."
6.1.2 All representations and warranties of the Selling
Shareholders and CIC contained in this Agreement shall have been true in all
material respects when made on the date of execution of this Agreement, and also
at and as of the Closing Date as if such representations and warranties were
made at and as of the Closing Date. The Selling Shareholders shall furnish the
Purchaser with a certificate, dated the Closing Date and signed on behalf of CIC
by a duly authorized officer thereof, and by each of the Selling Shareholders,
stating the above in such form as the Purchaser may reasonably request. The
acceptance of the Purchase Price by the Selling Shareholders shall constitute an
affirmation by each of the Selling Shareholders of the truth, as of the Closing
Date, of the representations and warranties made by such Selling Shareholders in
this Agreement.
6.2 Performance by the Selling Shareholders and CIC.
6.2.1 The Selling Shareholders and CIC shall have performed
and complied in all material respects with all agreements, covenants and
conditions required by this Agreement to be performed and complied with by them,
and the Selling Shareholders shall deliver a certificate to that effect, dated
the Closing Date and signed in the manner set forth in Section 6.1.2 above.
6.2.2 Each of the Selling Shareholders shall deliver to the
Purchaser evidence, satisfactory to Purchaser's counsel, that he has full right
and title to, and rights to convey, the CIC Shares and that there are no
outstanding options on, rights to or claims regarding the capital stock of CIC.
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6.3 Legal Prohibition. On the Closing Date, there shall exist no
injunction or final judgment, law or regulation prohibiting the consummation of
the transactions contemplated by this Agreement.
6.4 Tender of CIC Shares of the Selling Shareholders. Each of the
Selling Shareholders shall deliver to the Purchaser shares, options, warrants or
other rights to acquire the CIC stock of the Selling Shareholders free and clear
of any liens, encumbrances and other obligations.
6.5 Financial Conditions. CIC shall have no contingent or other
liabilities connected with its business, except as disclosed in the CIC
Financial Statements or as described in Section 6.5 of the Disclosure Schedule.
The review of CIC and the CIC Financial Statements and the business to be
conducted on behalf of the Purchaser at its expense shall not have revealed any
matter in which the reasonable business judgment of the Purchaser makes the
acquisition on the terms herein set forth inadvisable for the Purchaser. The
Purchaser shall complete its review under this Section 6.5 on or before December
20, 1996, unless extended by written notice on or before such date given by the
Purchaser to CIC and the Selling Shareholders if the Purchaser requires
additional time to complete its review, but in no event to a date later than
January 6, 1997, or the conditions set forth in this Section shall be deemed to
have been satisfied.
6.6 Employment Agreements. Employment Agreements in the forms set forth
in Exhibit 6.6 shall have been executed between CIC and each employee whom the
Purchaser reasonably considers important to the business of CIC as of the
Closing Date. The Purchaser shall have identified employees who are to execute
such Employment Agreements under this Section 6.6, and such Agreements shall
have been executed on or before December 20, 1996, or the conditions set forth
in this Section shall be deemed satisfied.
6.7 Consulting Agreement. A consulting agreement in a form mutually
acceptable to Tucker and the Purchaser and set forth in Exhibit 6.7 shall have
been executed between Tucker and CIC ("Consulting Agreement") on or before
December 20, 1996. Such Consulting Agreement shall be for a term of 18 months
and shall require that Tucker provide (i) full-time consulting services for a
period of six months following the Closing Date in consideration for a salary of
$37,500 and (ii) consulting services on a part-time, as-needed basis, for the
remaining 12 month period, in blocks of at least one week each, in consideration
for a fee of $100 per hour plus approved out-of-pocket expenses.
6.8 Due Diligence Inspection of the Premises and Operations and
Confidentiality. During the period after execution of this Agreement and prior
to the Closing, the Purchaser shall have the right to inspect all plant,
equipment and operations of CIC, its premises and its financial and other
records at reasonable times upon the approval of the Selling Shareholders and
CIC, which approval will not be unreasonably withheld. The Purchaser shall also
have the right to discuss the affairs of CIC with its managers, employees,
suppliers, advertisers, retailers, banking and other financial institutions,
lessors and such other parties as Purchaser deems appropriate, upon reasonable
notice of the proposed times and dates thereof. CIC will cooperate with all
reasonable requests by Purchaser for information and shall use its best efforts
to secure the cooperation of the foregoing third parties who may be reasonably
requested to furnish information. If the Closing shall not occur, neither party
shall divulge any information or confidential data received by it except to the
extent required to so disclose the same by law and except for information
already publicly available.
6.9 Outstanding Obligations to Employees. There shall be no outstanding
claims, loans or obligations of CIC owed to any employees or officers of CIC,
except for the loan to Thompson Brown in the principal amount of $70,000 and for
any other claims, loans or obligations approved by the Purchaser, provided that
the Purchaser shall give notice to the Selling Shareholders and CIC of its
approval or
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withholding of approval of any claims, loans or obligations then known to
Purchaser on or before December 20, 1996.
6.10 Consent of Material Customers. Prior to Closing CIC shall have
obtained all approvals in connection with the transfer of the CIC Shares by the
Selling Shareholders to the Purchaser as may be required by any material
contracts between CIC and any of its principal customers, including but not
limited to the State of Tennessee, and such approvals shall have been issued in
written form and substance satisfactory to the Purchaser and their counsel or
the Purchaser shall have waived such requirements. Unless the Purchaser shall
have obtained such approvals by December 20, 1996, or notified CIC and the
Selling Shareholders where such approvals were not obtained by such date, the
Purchaser shall be deemed to have waived the conditions required by this Section
6.10.
6.11 Net Worth Certification. The Purchaser shall have received a
certificate, dated the Closing Date, from the Selling Shareholders and CIC in
the form and substance satisfactory to the Purchaser that the consolidated net
worth of CIC, as of the Closing Date, according to generally accepted accounting
principles, consistently applied, is not less than Two Million Seven Hundred
Forty-Five Thousand and No/100 Dollars ($2,745,000) as of the Closing Date. Net
worth shall consist of total stockholder's equity, as shown on CIC's balance
sheet as of November 30, 1996, calculated in accordance with generally accepted
accounting principles consistently applied.
6.12 Net Tangible Assets. The Purchaser shall have received a
certificate, dated the Closing Date, from the Selling Shareholders and CIC in
the form and substance satisfactory to the Purchaser that the Net Tangible
Assets of CIC, as of the Closing Date, according to generally accepted
accounting principles, are valued at not less than Three Hundred Sixty Thousand
and No/100 Dollars ($360,000) as of the Closing Date. Net tangible assets shall
consist of the property and equipment of CIC, after depreciation, as shown on
CIC's balance sheet as of November 30, 1996, calculated in accordance with
generally accepted accounting principles consistently applied.
6.13 Working Capital. The Purchaser shall have received a certificate,
dated the Closing Date, from the Selling Shareholders and CIC in the form and
substance satisfactory to the Purchaser that the total current assets less
current liabilities of CIC shall not be less than Two Million One Hundred
Seventy Thousand and No/100 Dollars ($2,170,000), as shown on CIC's balance
sheet as of November 30, 1996, calculated in accordance with generally accepted
accounting principles consistently applied.
6.14 Obligations to Third Parties. There shall be no loans or
obligations outstanding from CIC to any third party, except those incurred in
the ordinary course of business.
6.15 Financing. Except as set forth in Section 6.15 of the Disclosure
Schedule, all lines of credit, debts, financing arrangements, leases and other
material contracts of CIC shall be acceptable to Purchaser and continue under
their present terms and conditions after the Closing Date, and all approvals
relating to the transfer of control of CIC and to effect the transaction
contemplated hereby required by the foregoing instruments and arrangements shall
have been obtained as of the Closing Date; provided, however, that with respect
to any financing provided by SunTrust Bank to CIC, (i) the Purchaser shall
provide notice to the Selling Shareholders no later than two (2) business days
prior to the Closing Date or December 20, 1996, whichever is the first to occur,
whether such financing terms or documents are acceptable to the Purchaser and
(ii) the obligation of any Selling Shareholder to guarantee, pay or secure any
such SunTrust financing shall terminate no later than the Closing Date.
6.16 Intellectual Properties. All trademarks, trade names, service
marks, licenses or other rights CIC used in connection with its business shall
be free and clear of any encumbrances, controversies,
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infringement or other claims and obligations ("License Encumbrances") on the
Closing Date, except for License Encumbrances approved by the Purchaser,
provided that Purchaser shall give notice to the Selling Shareholders and CIC of
its approval or withholding of approval of any License Encumbrance then known to
Purchaser on or before December 20, 1996.
6.17 Non-Compete of Selling Shareholders. The Selling Shareholders
shall have entered into non-compete agreements with the Purchaser in a form
mutually acceptable to the Selling Shareholders and the Purchaser on or before
December 20, 1996 and attached as Exhibit 6.17 to this Agreement.
6.18 Escrow of Termination Fee. The Selling Shareholders shall have
entered into a Termination Fee Escrow Agreement with the Purchaser as set forth
as Exhibit 6.18. The Termination Fee Escrow Agreement will be in a form
acceptable to the Selling Shareholders and the Purchaser and be executed by the
parties on or before December 16, 1996.
ARTICLE 7
Conditions Precedent to Obligations of
the Selling Shareholders and CIC
The obligations of the Selling Shareholders and CIC under this
Agreement shall be subject to the satisfaction, on or prior to the Closing Date,
of all of the following conditions, any one or more of which may be waived by
the Selling Shareholders and CIC:
7.1 Representations and Warranties Accurate. All representations and
warranties of the Purchaser contained in this Agreement shall have been true in
all material respects when made, and also at and as of the Closing Date as if
such representations and warranties were made at and as of the Closing Date. The
Purchaser shall deliver to the Selling Shareholders a certificate, dated as of
the Closing Date and signed by an officer of the Purchaser, stating the above in
such form as the Selling Shareholders may reasonably request.
7.2 Performance by the Purchaser. The Purchaser shall have performed
and complied in all material respects with all agreements, covenants and
conditions required by this Agreement, including the conditions precedent set
forth in Section 6.6, "Employment Agreements," Section 6.7, "Consulting
Agreement," Section 6.15, "Financing," Section 6.17, "Non-Compete of Selling
Shareholders," Section 6.18, "Escrow of Termination Fee," and Section 2.2,
"Purchase Price and Payment for CIC Shares," to be performed and complied with
by it prior to or on the Closing Date, or such earlier date specified in this
Agreement, and there shall be delivered to the Selling Shareholders and CIC a
certificate to that effect, dated the Closing Date and signed in the manner set
forth in Section 7.1 above.
7.3 Satisfaction of Certain Conditions. The condition precedent to the
Purchaser's obligations set forth in Section 6.3, "Legal Prohibition," shall
equally constitute conditions precedent to the obligations of the Selling
Shareholders and CIC and shall be satisfied.
7.4 Opinion of Counsel. The Selling Shareholders and CIC shall have
received an opinion of counsel for the Purchaser in the form set forth in
Exhibit 7.4.
7.5 Escrow of Termination Fee. The Purchaser shall have entered into a
Termination Fee Escrow Agreement with the Selling Shareholders as set forth in
Exhibit 6.18. The Termination Fee Escrow Agreement will be in a form acceptable
to the Selling Shareholders and the Purchaser and be executed by the parties on
or before December 16, 1996.
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ARTICLE 8
Closing
8.1 Closing Date. The date of closing of the transaction (the "Closing
Date") shall be as soon as practicable after (i) Purchaser obtains the consent
of both of the Selling Shareholders; (ii) completion of the due diligence
investigation described in Section 6.8; (iii) execution of this Agreement; (iv)
satisfaction of all the conditions to closing set forth in Articles 6,
"Conditions Precedent to Obligations of the Purchaser," and 7, "Conditions
Precedent to Obligations of the Selling Shareholders and CIC"; and (v) receipt
of any required approvals under Arizona and Tennessee corporate law and any
other required regulatory approvals. The Closing Date shall be not later than
December 23, 1996, provided that the Closing Date may be extended to a date
between January 6, 1997 and January 17, 1997 by written notice given by the
Purchaser to the Selling Shareholders on or before December 20, 1996. The
Purchaser shall have the option to extend the Closing Date for a period equal to
any delay by CIC in delivering the CIC Financial Statements or any other
document or information contemplated or required in the Disclosure Schedule or
Exhibits to the Purchaser. No other extension of the Closing Date beyond the
foregoing dates shall be made unless mutually agreed between the parties to this
Agreement.
8.2 Deliveries by the Purchaser on the Closing Date. The Purchaser
shall deliver the certificates contemplated by Sections 7.1 and 7.2 and the
opinion of counsel of the Purchaser in the form set forth as Exhibit 7.4 hereto,
to CIC and the Selling Shareholders at the Closing.
8.3 Deliveries by CIC and the Selling Shareholders on the Closing Date.
CIC and Selling Shareholders shall deliver the following to the Purchaser at
Closing:
8.3.1 Certificates contemplated by Sections 7.1.1 and 7.1.2
regarding representations and warranties;
8.3.2 Certificates of good standing in each of the states in
which CIC is incorporated or qualified stated that CIC is a validly existing
corporation in good standing;
8.3.3 A certificate, dated as of the Closing, signed by the
Selling Shareholders and by an officer of CIC to the effect that the conditions
specified in Section 7, "Conditions Precedent to Obligations of the Purchaser,"
have been satisfied;
8.3.4 An opinion of counsel to CIC and the Selling
Shareholders in the form attached hereto as Exhibit 8.3.4;
8.3.5 Copies of duly adopted resolutions of the board of
directors of CIC approving the execution, delivery and performance of this
Agreement and any other agreements and instruments contemplated by this
Agreement, certified by the Secretary of CIC;
8.3.6 A true, correct and complete copy of the Charter, as
amended, of CIC, certified by the Secretary of Tennessee, and a true, correct
and complete copy of the Bylaws, as amended, of CIC, certified by the Corporate
Secretary;
8.3.7 The resignations of any officers or directors of CIC and
terminations of any employment or consulting agreements, all as requested by the
Purchaser; and
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8.3.8 Certificates in the form required by Section 2.1,
"Purchase and Sale," representing the CIC Shares of the Selling Shareholders to
the Purchaser.
ARTICLE 9
Post Closing Covenants of the Purchaser
9.1 From the period after the Closing through December 31, 1996, the
Purchaser will make no material change in the operation of the business of CIC
which would cause a material adverse change in its assets, liabilities,
financial condition or business.
ARTICLE 10
Termination
10.1 Termination Events. This Agreement may be terminated and
abandoned, by notice given in the manner hereinafter provided:
10.1.1 By the Purchaser, if without fault of the Purchaser all
of the conditions set forth in Article 6, "Conditions Precedent to Obligations
of the Purchaser," shall not have been satisfied (or are incapable of being
satisfied) on or before the Acceptance Date or the Closing Date and have not
been waived by the Purchaser on or before such dates, as the case may be;
10.1.2 By the Selling Shareholders and CIC, if without their
fault all of the conditions set forth in Article 7, "Conditions Precedent to
Obligations of the Selling Shareholders and CIC," shall not have been satisfied
(or are incapable of being satisfied) on or before the Closing Date and have not
been waived by the Selling Shareholders and CIC on or before such date.
10.1.3 By either the Purchaser or CIC upon notice to the other
party upon the satisfaction of the conditions set forth in Section 6.17, "Escrow
of Termination Fee," and upon payment by terminating party to the other party of
the Termination Fee, which Termination Fee shall be deemed the exclusive remedy
of the parties for any claim which the terminating party may have against the
terminated party pursuant to Section 6.18, "Escrow of Termination Fee."
10.2 Effect of Termination. In the event this Agreement is terminated
pursuant to Section 10.1, "Termination Events," this Agreement shall forthwith
become void, and, except as provided in the Termination Fee Escrow Agreement,
there shall be no liability or continuing obligations on the part of the parties
hereunder.
ARTICLE 11
Indemnification
11.1 Survival of Representations, Warranties and Certain Covenants. The
representations and warranties made by the parties in this Agreement and in the
certificates delivered at the Closing, and all of the covenants of the parties
in this Agreement, shall survive the execution and delivery of this Agreement
and the Closing Date and shall expire on June 30, 1998. Any claim for
indemnification shall
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be effective only if notice of such claim is given by the party claiming
indemnification or other relief to the party against whom such indemnification
or other relief is claimed on or before June 30, 1998.
11.2 Indemnification by the Purchaser.
11.2.1 The Purchaser agrees to indemnify and hold the Selling
Shareholders harmless, from and after the Closing Date, against and in respect
of all matters in connection with any losses, liabilities, costs or damages
(including reasonable attorneys' fees) incurred by the Selling Shareholders that
result from any misrepresentation or breach of the warranties by the Purchaser
in Article 3, "Representations and Warranties of the Purchaser," or any breach
or nonfulfillment of any agreement or covenant on the part of the Purchaser
contained in this Agreement, and all suits, actions, proceedings, demands,
judgments, costs and expenses incident to the foregoing matters, including
reasonable attorneys' fees.
11.2.2 In no event shall the Purchaser's liability under
Section 11.2.1 above to the Selling Shareholders (other than for costs and
reasonable attorneys' fees incurred by such Selling Shareholder to which he or
it may be entitled pursuant to Sections 11.4 or 12.2.3) collectively exceed the
Purchase Price. No claim for indemnification may be made under this Article 11,
after June 30, 1998.
11.3 Indemnification by the Selling Shareholders.
11.3.1 Each of the Selling Shareholders agrees to indemnify
and hold the Purchaser harmless, from and after the Closing Date, against and in
respect of all matters in connection with any losses, liabilities or damages
(including reasonable attorneys' fees) incurred by the Purchaser resulting from
any misrepresentation or breach of his or its warranties in Article 4,
"Representations and Warranties of the Selling Shareholders," or any breach or
nonfulfillment of any agreement or covenant on the part of the Selling
Shareholders contained in this Agreement and all suits, actions, proceedings,
demands, judgments, costs and expenses incident to the foregoing matters,
including reasonable attorneys' fees. In addition, in the event that any matter
covered by indemnification may also be covered by insurance held by CIC in
effect immediately prior to the Closing Date, the Purchaser shall cause CIC to
make reasonable efforts to maintain in effect and to recover on such insurance
in mitigation of its indemnification claim.
11.3.2 Notwithstanding the provisions of Section 11.3.1 above,
the Purchaser shall be entitled to seek indemnification from the Selling
Shareholders pursuant to Section 11.3.1 only for the portion of the aggregate of
the losses, liabilities, costs and damages (including reasonable attorneys'
fees) incurred by the Purchaser which it would be entitled to claim under such
Section 11.3.1 that exceeds $75,000. Upon such occurrence, the collective
liability of the Selling Shareholders under Section 11.3.1 above to the
Purchaser (other than for costs and reasonable attorneys' fees incurred by the
Purchaser to which it may be entitled pursuant to Sections 11.4 or 12.2.3) will
not exceed the Purchase Price paid to the Selling Shareholders and CIC. No claim
for indemnification may be made under this Article 11 after June 30, 1998.
11.4 Arbitration. If the Purchaser believes that a matter has occurred
that entitles it to indemnification under Section 11.3, "Indemnification by the
Selling Shareholders," or any Selling Shareholder believes that a matter has
occurred that entitles him or it to indemnification under Section 11.2,
"Indemnification by the Purchaser," the Purchaser or the Selling Shareholder, as
the case may be (the "Indemnified Party"), shall give written notice to the
party or parties against whom indemnification is sought (each of whom is
referred to herein as an "Indemnifying Party") describing such matter in
reasonable detail. The Indemnified Party shall be entitled to give such notice
prior to the establishment of the amount of its losses, liabilities, costs or
damages, and to supplement its claim from
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<PAGE>
time to time thereafter by further notices as they are established. Each
Indemnifying Party shall send a written response to such claim for
indemnification within thirty (30) days after receipt of the claim stating its
acceptance or objection to the indemnification claim, and explaining its
position in respect thereto in reasonable detail. If such Indemnifying Party
does not timely so respond, it will be deemed to have accepted the Indemnified
Party's indemnification claim as specified in the notice given by the
Indemnified Party. If the Indemnifying Party gives a timely objection notice,
then the parties will negotiate in good faith to attempt to resolve the dispute,
and upon the expiration of an additional thirty (30) day period from the date of
the objection notice or such longer period as to which the Indemnified and
Indemnifying Parties may agree, any such dispute shall be submitted to
arbitration in Dallas, Texas to a member of the American Arbitration Association
mutually appointed by the Indemnified and Indemnifying Parties (or, in the event
the Indemnified and Indemnifying Parties cannot agree on a single such member,
to a panel of three members of such Association selected in accordance with the
rules of such Association), who shall promptly arbitrate such dispute in
accordance with the rules of such Association and report to the parties upon
such disputed items, and such report shall be final, binding and conclusive on
the parties. Judgment upon the award by the arbitrator(s) may be entered in any
court having jurisdiction. The prevailing party in any such arbitration shall be
entitled to recover from, and have paid by, the other party hereto all fees and
disbursements of such arbitrator or arbitrators. For this purpose, a party shall
be deemed to be the prevailing party only if such party would be deemed to be a
prevailing party under paragraph 11.2.3.
11.5 No Finders. The Purchaser represents and warrants to the Selling
Shareholders and Selling Shareholders represent and warrant there are no
obligations to pay any fee or commission to any broker, finder or intermediary
for or on account of the transactions contemplated by this Agreement. The
Purchaser agrees to indemnify and hold the Selling Shareholders harmless from
any breach of the Purchaser's representation in the previous sentence, and the
Selling Shareholders agree to indemnify and hold the Purchaser harmless from any
breach of their representation in the previous sentence.
11.6 Third Person Claim Procedures. If any third person asserts a claim
against an Indemnified Party in connection with the matter involved in such
claim, the Indemnified Party shall promptly (but in no event later than ten (10)
days prior to the time at which an answer or other responsive pleading or notice
with respect to the claim is required) notify the Indemnifying Party of such
claim. The Indemnifying Party shall have the right, at its election, to take
over the defense or settlement of such claim by giving prompt notice to the
Indemnified Party that it will do so, such election to be made and notice given
in any event at least five (5) days prior to the time at which an answer or
other responsive pleading or notice with respect thereto is required. If the
Indemnifying Party makes such election, the Indemnifying Party may conduct the
defense of such claim through counsel of its choosing (subject to the
Indemnified Party's approval, not to be unreasonably withheld), will be
responsible for the expenses of such defense, and shall be bound by the results
of its defense or settlement of the claim to the extent it produces damage or
loss to the Indemnified Party. The Indemnifying Party shall not settle such
claims without prior notice to and consultation with the Indemnified Party, and
no such settlement involving any injunction or material and adverse effect on
the Indemnified Party may be agreed to without its consent. As long as the
Indemnifying Party is diligently contesting any such claim in good faith, the
Indemnified Party shall not pay or settle any such claim. If the Indemnifying
Party does not make such election, or having made such election does not proceed
diligently to defend such claim prior to the time at which an answer or other
responsive pleading or notice with respect thereto is required, or does not
continue diligently to contest such claim, then the Indemnified Party may take
over defense and proceed to handle such claim in its exclusive discretion, and
the Indemnifying Party shall be bound by any defense or settlement that the
Indemnified Party may make in good faith with respect to such claim. The parties
agree to cooperate in defending such third party claims, and the defending party
shall have access to records, information and personnel in control of the other
part which are pertinent to the defense thereof.
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<PAGE>
11.7 Limitation of Remedies. No party to this Agreement shall be liable
to any other party or parties or have any remedies against any other party or
parties under this Agreement other than as provided in Article 10,
"Termination," and Article 11, "Indemnification." The parties understand that
this requires that all disputed claims shall be submitted to arbitration in
accordance with Section 11.4, "Arbitration."
ARTICLE 12
Miscellaneous
12.1 Access and Information.
12.1.1 CIC shall provide to the Purchaser and its counsel,
accountants and other representatives reasonable access during normal business
hours during the period between the date of the Agreement and the Closing Date
or Termination Date, if earlier, to all of the properties, books, records,
contracts and commitments of CIC, and shall furnish, or authorize its counsel
and accountants to furnish, to the Purchaser and its representatives all such
information as the Purchaser may reasonably request. The Purchaser will contact
and carry on discussions with the customers, prospective customers, suppliers,
employees and all persons and entities under contract with CIC only after the
Purchaser has received the permission of CIC to do so.
12.1.2 The Purchaser shall keep all confidential information
derived from the Selling Shareholders or from CIC relating to the business of
CIC confidential pending the Closing of the transaction contemplated by this
Agreement. The Selling Shareholders shall keep all confidential information
derived from the Purchaser relating to the business of the Purchaser
confidential pending the Closing.
12.1.3 If this Agreement should be terminated pursuant to
Article 10, the Purchaser and the Selling Shareholders shall return all such
confidential information and documents which they have received and agree not to
disclose or use such information in any manner which damages the businesses or
prospects of CIC, or of the Purchaser, as the case may be.
12.2 Expenses.
12.2.1 The Purchaser shall be solely responsible for paying
its own expenses and costs incident to the preparation of this Agreement and to
the consummation of the transactions contemplated by this Agreement, and shall
have no obligation for paying such expenses or costs of the other parties.
12.2.2 The Selling Shareholders and CIC shall be solely
responsible for paying their own expenses and costs, incident to the preparation
of this Agreement and to the consummation of the transactions contemplated by
this Agreement. The Selling Shareholders shall have no obligation to reimburse
the expenses or costs of the Purchaser.
12.2.3 Notwithstanding any of the other provisions hereof, in
the event of arbitration and/or litigation with respect to the interpretation or
enforcement of this Agreement or any provisions hereof, the prevailing party in
any such matter shall be entitled to recover from the other party his or its
reasonable costs and expense, including reasonable attorneys' fees, incurred in
such arbitration and/or litigation. For purposes of this Section 12.2.3, a party
shall be deemed to be the prevailing party only if such party (A)(i) receives an
award or judgment in such arbitration and/or litigation for fifty percent (50%)
or more of the disputed amount involved in such matter, or (ii) is ordered to
pay the other party less than
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<PAGE>
fifty percent (50%) of the disputed amount involved in such matter or (B)(i)
succeeds in having imposed a material equitable remedy on the other party (such
as an injunction or order compelling specific performance), or (ii) succeeds in
defeating the other party's request for such an equitable remedy.
12.3 Assignment. The rights and obligations of any party under this
Agreement may not be assigned or transferred without the prior written consent
of the Purchaser or the Selling Shareholders and CIC, as the case may be. Any
assignment in violation of this paragraph shall be void.
12.4 Construction. This Agreement shall be construed and enforced in
accordance with the laws of the State of Arizona.
12.5 Captions. Captions and headings used herein are for convenience
only and shall not be used in construing or interpreting this Agreement.
12.6 Gender and Number. Whenever the context of this Agreement so
requires, the masculine gender includes the feminine or neuter, the neuter
includes the masculine or feminine, and the singular number includes the plural.
12.7 Severability. Each provision hereof is severable from this
Agreement, and if one or more provisions hereof are declared invalid, the
remaining provisions shall nevertheless remain in full force and effect.
12.8 No Third-Party Beneficiaries. Each of the provisions of this
Agreement is for the sole and exclusive benefit of the parties thereto,
respectively, as their interests appear, and shall not be deemed for the benefit
of any other person.
12.9 Amendment. This Agreement may be amended only by the mutual
written agreement of the Purchaser, the Selling Shareholders and CIC. Any such
written amendment executed as set forth in the preceding sentence shall be
binding upon all parties hereto. The failure of any party to enforce at any time
any of the provisions of this Agreement shall in no way be deemed a waiver of
any such provision, nor in any way affect the validity of this Agreement or any
part thereof.
12.10 Successors and Assigns. Subject to Section 12.3, "Assignment,"
this Agreement shall be binding upon and inure to the benefit of the successors
and assigns and heirs of the parties hereto.
12.11 Counterparts. This Agreement may be executed in two or more
counterparts, and by the different parties hereto on separate counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
12.12 Entire Agreement. This Agreement and its exhibits and schedules
constitute the entire contract among the parties hereto with respect to the
subject matter thereof, superseding all prior communications and discussions and
no party hereto shall be bound by any communication on the subject matter hereof
unless such is in writing signed by any necessary party thereto and bears a date
subsequent to the date hereof. The exhibits and schedules shall be construed
with and deemed as an integral part of this Agreement to the same extent as if
the same had been set forth verbatim herein. Information set forth in any
exhibit, schedule or provision of this Agreement shall be deemed to be set forth
in every other exhibit, schedule or provision of this Agreement and therefore
shall be deemed to be disclosed for all purposes of this Agreement.
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<PAGE>
12.13 Public Announcements. Except as otherwise required by law, or as
may be mutually consented and agreed to by the parties, none of the parties to
this Agreement shall issue any press release or make any other public statement
or statement to any third party not involved in the transaction, in each case
relating to or in connection with or arising out of this Agreement or the
matters contained in this Agreement, without obtaining prior approval of both
the Purchaser and CIC to the contents and the manner of presentation and
publication thereof.
12.14 Further Assurances. Each of the parties hereto shall use
commercially practicable efforts to fulfill all of the conditions set forth in
this Agreement over which it has control or influence (including obtaining any
consents necessary for the performance of such party's obligations hereunder)
and to consummate the transactions contemplated hereby, and shall execute and
deliver such further instruments and provide such documents as are necessary to
effect this Agreement.
12.15 Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be validly given if delivered
personally, or if by courier, telex or telecopier with receipt confirmed, or if
sent by certified or registered air mail return receipt requested, addressed, if
to the Purchaser to:
International FiberCom, Inc.
Attn: Joseph P. Kealy
3615 South 28th Street
Phoenix, Arizona 85040
With a copy to:
Streich Lang, P.A.
Attn: Christian J. Hoffmann, III
Renaissance One
Two North Central Avenue
Phoenix, Arizona 85004
or to such other person or at such other place as the Purchaser shall furnish to
the Selling Shareholders in writing; if to the Selling Shareholders or CIC to
them at:
Concepts in Communications, Inc.
Attn: H. Ray Tucker
5714 Charlotte Avenue
Nashville, Tennessee 37209
Cherokee Equity Corporation
Attn: William M. Wilson
3022 Vanderbilt Plaza
Nashville, Tennessee 37212
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<PAGE>
With a copy to:
Farris, Warfield & Kanaday
Attn: B. Riney Green, Esq.
SunTrust Center
424 Church Street
Suite 1900
Nashville, Tennessee 37219
or to such other person or at such other place as the Selling Shareholders or
CIC shall furnish the Purchaser in writing. Notice given by telex shall be
deemed delivered when received as evidenced by their answer back. Notice given
by facsimile shall be deemed delivered when receipt thereof is confirmed. Notice
given by certified or registered air mail as set out above shall be deemed
delivered at the earlier of (i) actual receipt as evidenced by the return
receipts, or (ii) five (5) business days after the date the same is postmarked
(if postmarked in the United States and addressed to a recipient in the United
States) or seven (7) business days after the date the same is postmarked (if
postmarked outside the United States or addressed to a recipient outside the
United States).
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first above written.
CONCEPTS IN COMMUNICATIONS, INC.
By /s/ H. Ray Tucker
--------------------------------
H. Ray Tucker
Its President
INTERNATIONAL FIBERCOM, INC.
By /s/ Joseph P. Kealy
--------------------------------
Joseph P. Kealy
Its President
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<PAGE>
SELLING SHAREHOLDERS:
/s/ H. Ray Tucker
----------------------------------
H. Ray Tucker
CHEROKEE EQUITY CORPORATION
By /s/ William M. Wilson
----------------------------------
William M. Wilson
Its President
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<PAGE>
FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT
The undersigned parties, having entered into that certain Stock
Purchase Agreement dated as of the 31st day of October 1996 ("Agreement"), by
and among International FiberCom, Inc. ("Purchaser"), Concepts in
Communications, Inc. ("CIC"), Cherokee Equity Corporation ("Cherokee"), and H.
Ray Tucker ("Tucker") hereby adopt the following amendments to the Agreement:
1. Section 2.2 is hereby amended and restated in its entirety to read
as follows:
2.2 Purchase Price and Payment for CIC Shares. In full
consideration for the purchase by the Purchaser of the CIC Shares of
the Selling Shareholders, the Purchaser shall pay the Selling
Shareholders the sum of Four Million Eight Hundred Thousand and No/100
Dollars ($4,800,000) on the Closing Date ("Purchase Price"). The
Purchase Price will be paid One Million Five Hundred Thousand Dollars
($1,500,000) in cash on the Closing Date and the balance of Three
Million Three Hundred Thousand ($3,300,000) will be represented by a
Promissory Note ("Note") in the form attached as Exhibit 2.2.
2. Section 2.4, "Escrow of Portion of Purchase Price," is hereby
deleted.
3. Sections 6.17, "Non-Compete of Selling Shareholders," and 6.18,
"Escrow of Termination Fee," are hereby deleted.
4. Section 7.2 is hereby amended and restated in its entirety to read
as follows:
7.2 Performance by the Purchaser. The Purchaser shall have
performed and complied in all material respects with all agreements,
covenants and conditions required by this Agreement, including the
conditions precedent set forth in Section 6.6, "Employment Agreements,"
Section 6.7, "Consulting Agreement," Section 6.15, "Financing," and
Section 2.2, "Purchase Price and Payment for CIC Shares," to be
performed and complied with by it prior to or on the Closing Date, or
such earlier date specified in this Agreement, and there shall be
delivered to the Selling Shareholders and CIC a certificate to that
effect, dated the Closing Date and signed in the manner set forth in
Section 7.1 above.
5. Section 7.5, "Escrow of Termination Fee," is hereby deleted.
6. Section 8.1 is hereby amended and restated in its entirety to read
as follows:
8.1 Closing Date. The date of closing of the transaction (the
"Closing Date") shall be as soon as practicable after (i) the Purchaser
obtains the consent of both of the Selling Shareholders; (ii) execution
of this Agreement; (iii) satisfaction of
<PAGE>
all the conditions to closing set forth in Articles 6, "Conditions
Precedent to Obligations of the Purchaser," and 7, "Conditions
Precedent to Obligations of the Selling Shareholders and CIC"; and (iv)
receipt of any required approvals under Arizona and Tennessee corporate
law and any other required regulatory approvals. The Closing Date shall
not be later than February 13, 1997. The Purchaser shall have the
option to extend the Closing Date for a period equal to any delay by
CIC in delivering the CIC Financial Statements or any other document or
information contemplated or required in the Disclosure Schedule or
exhibits to the Purchaser. No other extension of the Closing Date
beyond the foregoing date shall be made unless mutually agreed among
the parties to this Agreement.
7. Section 6.15 is hereby amended and restated in its entirety to read
as follows:
6.15 Financing. Except as set forth in Section 6.15 of the
Disclosure Schedule all lines of credit, debts, financing arrangements,
leases and other material contracts of CIC shall be acceptable to
Purchaser and continue under their present terms and conditions after
the Closing Date, and all approvals relating to the transfer of control
of CIC and to effect the transaction contemplated hereby required by
the foregoing instruments and arrangements shall have been obtained as
of the Closing Date.
8. Section 9.2 is added as follows:
9.2 SunTrust Bank Financing. The Purchaser shall, on or before
March 13, 1997, cause SunTrust Bank, Nashville, N.A. ("SunTrust") to
release the Selling Shareholders from their obligations as guarantors
in connection with a Note dated as of September 26, 1996 by and between
CIC as borrower and SunTrust as Lender ("SunTrust Note"); provided,
however, that if the Purchaser does not obtain such release by such
date, the Purchaser will pay the Selling Shareholders a fee equal to 2%
of the outstanding principal amount under the Note on such date by
March 18, 1997. The Purchaser shall, in any event, have obtained the
release of the Selling Shareholders as guarantors under the SunTrust
Note on or before May 13, 1997.
9. The Agreement, as amended by this Amendment, shall constitute one
agreement. All other terms and provisions of the Agreement shall remain in full
force and effect. If there is any inconsistency with the terms of the Agreement
and the Amendment, the terms of this Amendment shall govern. Capitalized terms
in this Amendment shall have the same meaning as the terms in the Agreement.
This Amendment shall be deemed effective as of January 17, 1997.
IN WITNESS WHEREOF, the parties have executed this Amendment to the
Agreement as of January 17, 1997.
2
<PAGE>
CONCEPTS IN COMMUNICATIONS, INC.
By /s/ H. Ray Tucker
-------------------------------
H. Ray Tucker
Its President
INTERNATIONAL FIBERCOM, INC.
By /s/ Joseph P. Kealy
-------------------------------
Joseph P. Kealy
Its President
SELLING SHAREHOLDERS:
/s/ H. Ray Tucker
-------------------------------
H. Ray Tucker
CHEROKEE EQUITY CORPORATION
By /s/ William M. Wilson
-------------------------------
William M. Wilson
Its President
3
