EXHIBIT 4.5
WARRANT EXERCISE AND SECURITIES EXCHANGE AGREEMENT
[$340,000 RULE 504 NOTES]
This WARRANT EXERCISE AND SECURITIES EXCHANGE AGREEMENT is dated and
effective as of July ___, 1996, and is being entered by and between or among, as
the case may be, ▇▇▇▇▇ COMMUNICATIONS, INC., a Delaware corporation, and the
person or persons whose name or names, as the case may be, is or are set forth
on the signature page hereto, with reference to the following RECITALS:
RECITALS
Each of the Investors owns the Notes or Current Warrants, or both, set
forth on Exhibit A.
Each of the Investors desires to exercise the Modified Warrants and to
exchange the Notes for shares of the Series C Stock.
NOW, THEREFORE, in consideration of the recitals and of the respective
covenants, representations, warranties and agreements herein contained, and
intending to be legally bound hereby, the parties hereto do hereby agree as
follows:
SECTION 1. DEFINITIONS.
For convenience and brevity, certain terms used in various parts of
this Agreement are listed in alphabetical order and defined or referred to below
(such terms to be equally applicable to both singular and plural forms of the
terms defined).
"Agreement" means this Warrant Exercise and Securities
Exchange Agreement.
"Business Day" means any calendar day which is not a Saturday,
Sunday or other day on which commercial banks in Dallas, Texas, or New
York, New York, are authorized or required to close by applicable law.
"Closing" and "Closing Date" are defined in Section 3.1.
"Common Stock" means the 20,000,000 authorized shares of
Common Stock, par value $0.01 per share, of the Company.
"Company" means ▇▇▇▇▇ Communications, Inc., a Delaware
corporation.
"Contract" means any written or oral contract, agreement,
lease, plan, instrument or other document, commitment, arrangement,
undertaking, practice or authorization that is or may be binding on any
person or its property under applicable law.
"Court Order" means any judgment, decree, injunction, order or
ruling of any federal, state or local court or governmental or
regulatory body or authority that is binding on any person or its
property under applicable law.
"Current Investments" means the Notes or the Current Warrants,
or both, as the case may be.
"Current Warrants" means the warrants to purchase shares of
the Common Stock of the Company, if any, constituting a part of the
Current Investments owned by each of the Investors as set forth in
Column B of Exhibit A.
"Default" means (1) a breach of or default under any Contract,
(2) the occurrence of an event that with the passage of time or the
giving of notice or both would constitute a breach of or default under
any Contract, or (3) the occurrence of an event that with or without
the passage of time or the giving of notice or both would give rise to
a right of termination, renegotiation or acceleration under any
Contract.
"Governmental Authority" means any federal, state, local or
other governmental agency or body or of any other type of regulatory
body, including, without limitation, those covering environmental,
energy, safety, health, transportation, bribery, recordkeeping, zoning,
antidiscrimination, antitrust, wage and hour, and price and wage
control matters.
"HOLD Closing Date" means the "Closing Date," as defined in
the HOLD Merger Agreement.
"HOLD Merger Agreement" means that certain Agreement and Plan
of Merger, dated as of May 3, 1996, among the Company, ▇▇▇▇▇
Acquisition Sub, Inc., Home Owners Long Distance Incorporated, ▇▇▇▇▇▇
▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ Stock Trust Fund No. 1,
and ▇▇▇▇▇▇ ▇. ▇▇▇▇.
"Investor" or "Investors" means the person or persons listed
on Exhibit A, who is or who are the owner or the owners, as the case
may be, of all of the Current Investments.
"Licenses" means licenses, franchises, permits, easements,
rights and other authorizations.
"Lien" means any mortgage, lien, security interest, pledge,
encumbrance, restriction on transferability, defect of title, charge or
claim of any nature whatsoever on any property or property interest.
"Litigation" means any lawsuit, action, arbitration,
administrative or other proceeding, criminal prosecution or
governmental investigation or inquiry involving or affecting any party
hereto or any Contracts to which any party hereto is a party or by
which such party or any of such party's assets may be bound or
affected.
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"Modified Warrants" means the Current Warrants, the exercise
prices of which have been reduced as herein provided.
"Notes" means the promissory notes, if any, or interests in
promissory notes, if any, constituting a part of the Current
Investments owned by each of the Investors as set forth in Column E of
Exhibit A.
"Person" or "person" means any natural person, firm,
partnership, association, corporation, company, business trust, trust,
Governmental Authority or other entity.
"Preferred Stock" means the 20,000,000 authorized shares of
Preferred Stock, par value $0.01 per share, of the Company.
"Registrable Securities" means the shares of Common Stock
issuable to each of the Investors upon the exercise of the Modified
Warrants or the conversion of the Series C Stock, or both.
"Regulation" means any statute, law, ordinance, regulation,
order or rule of any Governmental Authority.
"Regulation D" means Regulation D promulgated by the SEC under
the Securities Act.
"SEC" means the United States Securities and Exchange
Commission.
"Securities" means the shares of the Series C Stock to be
issued to each of the Investors pursuant to the terms and conditions of
this Agreement, and the shares of Common Stock issuable to each of the
Investors upon the exercise of the Modified Warrants or the conversion
of the Series C Stock, or both.
"Securities Act" means the Securities Act of 1933, as amended.
"Series C Stock" means the Series C Junior Convertible
Redeemable Preferred Stock of the Company.
"Transactions" means the contemporaneous exercise of the
Modified Warrants by each of the Investors upon the signing of this
Agreement and the exchange of the Notes by each of the Investors for
the Securities of the Company at the Closing, in each case as herein
provided, and all related transactions provided for in or contemplated
by this Agreement or any Exhibit hereto.
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SECTION 2. THE TRANSACTIONS.
2.1 EXCHANGE OF NOTES FOR PREFERRED STOCK. Subject to the
terms and conditions hereinafter set forth, and on the basis of and in reliance
upon the representations, warranties, obligations and agreements set forth
herein, at the Closing each Investor shall sell, transfer, assign and convey to
the Company, and the Company shall purchase from each Investor, all of the Notes
owned by such Investor in exchange for the shares of the Series C Stock as set
forth after such Investor's name in Column F of Exhibit A.
2.2 REDUCTION OF EXERCISE PRICE OF CURRENT WARRANTS; EXERCISE
PRICE OF MODIFIED WARRANTS. Subject to the terms and conditions hereinafter set
forth, and on the basis of the representations, warranties, obligations and
agreements set forth herein, simultaneously with the execution and delivery of
this Agreement, the exercise price of the Current Warrants shall be reduced to
$1.50 per share of Common Stock.
2.3 EXERCISE OF MODIFIED WARRANTS. In consideration of the
reduction of the exercise price of the Current Warrants as herein provided, the
Investors shall exercise all the Modified Warrants contemporaneously with the
execution and delivery of this Agreement. The full purchase price therefor shall
be paid to the Company contemporaneously with the execution and delivery of this
Agreement by wire transfer of immediately available funds to the Company's bank
account in Dallas, Texas, or by delivery to the Company of a cashier's check
payable to the order of the Company.
2.4 DEFAULT BY ANY INVESTOR AT THE CLOSING. Notwithstanding
the provisions of Section 2.1, if any of the Investors shall fail or refuse to
deliver any of the Notes as provided in Section 2.1, or if any of the Investors
shall have failed or refused to exercise the Modified Warrants as provided in
Section 2.3, or if any of the Investors shall fail or refuse to consummate the
other transactions described in this Agreement prior to or on the Closing Date,
such failure or refusal shall not relieve the other Investors of any obligations
under this Agreement, and the Company, at its option and without prejudice to
its rights against any such defaulting Investor, may either (1) acquire the
remaining Notes which it is entitled to acquire hereunder, or (2) refuse to make
such acquisition and thereby terminate all of its obligations hereunder. Each of
the Investors acknowledges that the Notes are unique and otherwise not available
and agree that in addition to any other remedies, the Company may invoke any
equitable remedies to enforce delivery of the Notes hereunder, including,
without limitation, an action or suit for specific performance.
SECTION 3. CLOSING.
3.1 CLOSING DATE. The consummation of the exchange of the
Notes for the Series C Stock (the "Closing") shall take place on such date, and
at such time and place, or as the Company shall hereafter specify by notice to
the Investors. The Closing may take place at such other time or place on such
other date as the Company and the Investors may agree to in writing. In either
event, at the option of the Company, the Closing may occur by the Company's and
the Investors' exchanging facsimile copies of the executed originals of the
documents,
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certificates, opinions and other instruments referred to in Section 3.2 hereof,
the executed originals of which shall be delivered by such means as the Company
and the Investors may mutually agree. In the event that the Company exercises
its option to have the Closing occur in this manner, the Closing shall be deemed
to have occurred on the date and time specified by the Company in Dallas, Texas,
for all purposes. The date of the Closing is hereinafter sometimes referred to
as the "Closing Date."
3.2 DELIVERIES. At the Closing, subject to the provisions of
this Agreement, each Investor shall deliver to the Company, free and clear of
all Liens, the Notes, in negotiable form, duly endorsed in blank, or with
separate notarized stock or bond transfer powers attached thereto and signed in
blank, in exchange for the shares of the Series C Stock set forth opposite each
Investor's name in Column F on Exhibit A. At the Closing, each of the Investors
shall also deliver to the Company, and the Company shall deliver to each of the
Investors, the certificates, opinions and other instruments and documents
referred to in Sections 8 and 9.
3.3 TERMINATION. In the event that the Closing shall not have
taken place on or before five Business Days following the HOLD Closing Date, or
such later date as shall be mutually agreed to in writing by the Company and
each of the Investors, all of the rights and obligations of the parties under
this Agreement to exchange the Notes for the Series C Stock shall terminate
without liability, except for liability in the event the Closing does not occur
and this Agreement terminates by reason of a default or breach by any party
hereto. The exercise of the Modified Warrants as herein provided shall not be
affected in any manner whatsoever by a termination of this Agreement after the
date hereof.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each
Investor hereby represents and warrants to the Company, severally and not
jointly, and solely on each Investor's own behalf, as follows:
4.1 AUTHORITY AND BINDING EFFECT. Investor has the full power
and authority to execute, deliver and perform this Agreement and has taken all
actions necessary to secure all approvals required in connection therewith. This
Agreement constitutes the legal, valid and binding obligation of Investor,
enforceable against such Investor in accordance with its terms.
4.2 VALIDITY OF CONTEMPLATED TRANSACTIONS. Neither the
execution and delivery of this Agreement by Investor nor the consummation of the
transactions contemplated hereby will contravene or violate any Regulation or
Court Order which is applicable to Investor, or will result in a Default under,
or require the consent or approval of any party to, any Contract to or by which
Investor is a party or otherwise bound or affected, or require Investor to
notify or obtain any License from any Governmental Authority. Investor is not a
party to any Contract or subject to any restriction or any Court Order or
Regulation which affects or restricts the ability of Investor to consummate the
transactions contemplated hereby.
4.3 TITLE TO SECURITIES. Investor owns outright and has good
and marketable title to all of the Current Investments, and on the Closing Date
will own outright and have good and
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marketable title to the Notes, set forth in Column E of Exhibit A as being owned
by Investor, free and clear of all Liens.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby represents and warrants to each Investor as follows:
5.1 ORGANIZATION AND STANDING. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, having all requisite corporate power and authority to perform
its obligations under this Agreement.
5.2 AUTHORITY AND BINDING EFFECT. The Company has the
corporate power and authority to execute, deliver and perform this Agreement and
has taken all actions necessary to secure all approvals required in connection
therewith. The execution, delivery and performance of this Agreement by the
Company has been duly authorized by all necessary corporate action. This
Agreement constitutes the legal, valid and binding obligation of the Company,
enforceable against it in accordance with its terms.
5.3 VALIDITY OF CONTEMPLATED TRANSACTIONS. Neither the
execution and delivery of this Agreement by the Company nor the consummation of
the transactions contemplated hereby by the Company will contravene or violate
any Regulation or Court Order which is applicable to the Company, or the
Certificate of Incorporation or Bylaws of the Company, or will result in a
Default under, or require the consent or approval of any party to, any Contract
to or by which the Company is a party or by which it is otherwise bound or
affected, or require the Company to notify or obtain any License from any
Governmental Authority. The Company is not a party to any Contracts or subject
to any restriction or any Court Order or Regulation which affects or restricts
the ability of the Company to consummate the transactions contemplated hereby.
SECTION 6. INVESTMENT REPRESENTATIONS AND WARRANTIES. Each Investor
acknowledges that the Securities are being acquired for each Investor's own
account as part of a private offering, exempt from registration under the
Securities Act and all applicable state securities or blue sky laws, for
investment only and not with a view to the distribution or other sale thereof,
and that an exemption from registration under the Securities Act or any
applicable state securities laws may not be available if the Securities are
acquired by Investor with a view to resale or distribution thereof under any
conditions or circumstances as would constitute a distribution of the Securities
within the meaning and purview of the Securities Act or the applicable state
securities laws. Accordingly, each Investor represents and warrants to the
Company, severally and not jointly, and solely on each Investor's own behalf, as
follows:
6.1 OWN ACCOUNT. No other person will acquire, directly or
indirectly, any interest in the Securities (or any portion thereof) as a result
of Investor's acquisition of the Securities pursuant to this Agreement.
6.2 SECURITIES TO BE HELD FOR INVESTMENT. It is Investor's
intention to acquire and hold the Securities solely for Investor's private
investment and for Investor's own account
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and with no view or intention to distribute (including, without limitation, any
distribution to the shareholders of Investor pursuant to the terms of its
governing instruments), sell, resell, assign, pledge, mortgage, hypothecate, or
otherwise transfer or dispose of the Securities (or any portion thereof) except
pursuant to a valid exception from registration or a registered offering under
the Securities Act.
6.3 NO TRANSFERS OF SECURITIES CONTEMPLATED. Investor has no
contract, undertaking, agreement, or arrangement with any person to sell or
otherwise transfer to any person, or to have any person sell on behalf of
Investor, the Securities (or any portion thereof), and Investor is not engaged
in and does not plan to engage within the foreseeable future in any discussion
with any person relative to the sale or any transfer of the Securities (or any
portion thereof).
6.4 NO EVENTS REQUIRING TRANSFER OF SECURITIES. Investor is
not aware of any occurrence, event, or circumstance upon the happening of which
Investor intends to attempt to sell, resell, assign, pledge, mortgage,
hypothecate, or otherwise transfer or dispose of the Securities (or any portion
thereof), and Investor does not have any present intention of selling,
transferring, or otherwise disposing of the Securities (or any portion thereof)
after the lapse of any particular period of time.
6.5 ACCREDITED INVESTOR STATUS. Investor is, and will be on
the Closing Date, an "accredited investor," as such term is defined in the
Securities Act or Regulation D, and under the securities laws of certain states,
because Investor is described in one of the categories set forth below:
(A) a bank as defined in Section 3(a)(2) of the
Securities Act, whether acting in its individual or fiduciary capacity;
(B) a savings and loan association or other
institution as defined in Section 3(a)(5)(A) of the Securities Act, whether
acting in its individual or fiduciary capacity;
(C) a broker or dealer registered under Section 15
of the Securities Exchange Act of 1934, as amended;
(D) an insurance company as defined in Section 2(13)
of the Securities Act;
(E) an investment company registered under the
Investment Company Act of 1940, as amended, or a business development company as
defined in section 2(a)(48) of that Act;
(F) a Small Business Investment Company licensed by
the U.S. Small Business Administration under section 301(c) or (d) of the
Small Business Investment Act of 1958;
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(G) a plan established by a state, its political
subdivisions or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, and such plan has total assets
in excess of $5,000,000;
(H) (i) an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974, with the
investment decisions being made by a plan fiduciary, as defined in section 3(21)
of such Act, which is either a bank, savings and loan association, insurance
company, or registered investment adviser, or (ii) an employee benefit plan that
has total assets in excess of $5,000,000, or (iii) a self-directed employee
benefit plan and the investment decisions are made solely by persons that are
accredited investors;
(I) a private business development company as defined
in section 202(a)(22) of the Investment Advisors Act of 1940, as amended;
(J) an organization described in Section 501(c)(3) of
the Internal Revenue Code of 1986, as amended, corporation, Massachusetts or
similar business trust, or partnership, in each case, not newly formed, actively
engaged in a trade or business, and having total assets in excess of $5,000,000;
(K) a natural person with an individual net worth, or
joint net worth with Investor's spouse, in excess of $1,000,000;
(L) a natural person who had an individual income in
excess of $200,000 or joint income with Investor's spouse of $300,000 in each of
the two most recent years, and reasonably expects to reach the same income level
in the current year;
(M) a trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring any securities to
be offered in the future, whose purchase is directed by a person who has such
knowledge and experience in financial and business matters that such person is
capable of evaluating the merits and risks of the prospective investment, as
described in Rule 506(b)(2)(ii) of Regulation D; or
(N) an entity in which all the equity owners are
accredited investors.
6.6 SOPHISTICATED INVESTOR STATUS. Investor is, and will be on
the Closing Date, a sophisticated investor which has the capacity to protect
Investor's own interests in investments of this nature, and has such knowledge
and experience in financial and business matters that Investor is capable of
evaluating the merits and risks of this investment.
6.7 ALL NECESSARY INFORMATION RECEIVED. Investor has had all
documents, records, books and due diligence materials pertaining to the Company
and the Securities and the transactions contemplated by this Agreement made
available to Investor and Investor's accountants and advisors; Investor has also
had an opportunity to ask questions and receive answers concerning the Company
and the Securities and the transactions contemplated by this Agreement; and
Investor has all of the information deemed by Investor to be necessary or
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appropriate to evaluate the Company and the Securities and the transactions
contemplated by this Agreement and the risks and merits thereof and an
investment in the Securities.
6.8 NO RELIANCE ON OTHER INFORMATION. Investor is acquiring
the Securities solely upon the information provided to Investor as specified in
Section 6.7, together with information obtained by Investor through Investor's
independent investigation, and has not relied on any oral representations.
6.9 INVESTOR AWARE OF RISKS. Investor is aware of the
following:
(A) the Securities are speculative, with no assurance
of any income from the Securities;
(B) no federal or state agency has made any finding
or determination as to the fairness of the acquisition, or any recommendation or
endorsement of such acquisition;
(C) transferability of the Securities is highly
restricted and, accordingly, it may not be possible for Investor to liquidate
the Securities in case of emergency; and
(D) with respect to the tax aspects of an investment
in the Securities, Investor in making Investor's investment decision is not
relying to any degree upon the advice of the Company, or any person affiliated
therewith, but rather solely upon Investor's own legal, financial and tax
advisors.
SECTION 7. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations, warranties, covenants and agreements made by each party in this
Agreement or in any attachment, Exhibit, certificate, document or list delivered
by any such party pursuant hereto or in connection with the transactions
contemplated hereby shall survive the Closing, and each party hereto (taking the
Investors as a single party) shall be entitled to rely upon the representations
and warranties of the other party set forth in this Agreement.
SECTION 8. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY. Subject
to waiver as set forth in Section , the obligations of the Company to exchange
the Series C Stock for the Notes under this Agreement are subject to the
fulfillment prior to or at the Closing of each of the following conditions:
8.1 REPRESENTATIONS TRUE AT CLOSING. The representations and
warranties of the Investors set forth in Sections and shall be true and correct
on the Closing Date with the same effect as if made at that time.
8.2 PERFORMANCE BY THE INVESTORS. The Investors shall have
exercised the Modified Warrants as required by this Agreement and performed and
satisfied all agreements and conditions which each of them is required by this
Agreement to perform or satisfy prior to or on the Closing Date.
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8.3 RELEASE OF LIENS; DELIVERY OF COLLATERAL. The Investors
shall have delivered to the Company any and all documents and other instruments
(including, without limitation, Form UCC-3's or comparable documents) necessary,
advisable or desirable, and in proper form for filing with the appropriate
Governmental Authority, to release and discharge fully any and all Liens on any
assets of the Company or any of its subsidiaries constituting collateral for, or
otherwise securing the payment of, the Notes, and shall have delivered any and
all such assets of the Company or its subsidiaries to the Company or its
subsidiaries, as the case may be.
8.4 FORM AND CONTENT OF DOCUMENTS. The form and content of all
documents, certificates and other instruments to be delivered by the Investors
shall be reasonably satisfactory to the Company and its counsel.
8.5 LITIGATION AFFECTING CLOSING. No Court Order shall have
been issued or entered which would be violated by the completion of the
Transactions. No person who or which is not a party to this Agreement shall have
commenced or threatened to commence any Litigation seeking to restrain or
prohibit, or to obtain substantial damages in connection with, this Agreement or
the transactions contemplated by this Agreement and no Litigation shall be
pending against the Company or any Subsidiary.
8.6 REGULATORY COMPLIANCE AND APPROVALS. The Company shall be
satisfied that all approvals required under any Regulations to carry out the
Transactions shall have been obtained and that the parties shall have complied
with all Regulations applicable to the Transactions.
8.7 CONSENTS AND APPROVALS. The Investors and the Company
shall have obtained all consents and approvals necessary to complete the
Transactions and related transactions.
SECTION 9. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE INVESTORS.
Subject to waiver as set forth in Section 11.8, the obligations of the Investors
to exchange the Notes for the Series C Stock under this Agreement are subject to
the fulfillment prior to or at the Closing of each of the following conditions:
9.1 COMPANY REPRESENTATIONS TRUE AT CLOSING. The
representations and warranties of the Company set forth in Section shall be true
and correct on the Closing Date with the same effect as if made at that time.
9.2 PERFORMANCE BY THE COMPANY. The Company shall have
performed and satisfied all agreements and conditions which it is required by
this Agreement to perform or satisfy prior to or on the Closing Date.
9.3 FORM AND CONTENT OF DOCUMENTS. The form and content of all
documents, certificates and other instruments to be delivered by the Company
shall be reasonably satisfactory to the Investors.
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9.4 LITIGATION AFFECTING CLOSING. No Court Order shall have
been issued or entered which would be violated by the completion of the
Transactions. No person who or which is not a party to this Agreement shall have
commenced or threatened to commence any Litigation seeking to restrain or
prohibit, or to obtain substantial damages in connection with, this Agreement or
the transactions contemplated by this Agreement.
9.5 REGULATORY COMPLIANCE AND APPROVAL. The Investors shall be
satisfied that all approvals required under any Regulations to carry out the
Transactions shall have been obtained and that the parties have complied with
all Regulations applicable to the Transactions.
SECTION 10. REGISTRATION RIGHTS. The Company shall use its reasonable
best efforts to file a registration statement with the SEC to register the
Registrable Securities for sale by the Investors under the Securities Act within
180 days following the Closing Date, and to have such registration statement
declared effective. The Company shall use its reasonable best efforts to keep
such registration statement effective for a period of two years after the
Closing Date, or until the Registrable Securities may be sold by the Investors
without registration pursuant to Rule 144(k) under the Securities Act or
otherwise, whichever period is shorter. All costs of such registration shall be
borne by the Company except underwriting discounts and commissions incurred by
the Investors and fees and expenses of counsel for the Investors. Each of the
Investors agrees not to sell any of the Securities pursuant to such registration
statement at any time or from time to time and for such period or periods as the
Company may have a registration statement on file with the SEC for the sale of
securities of the Company for its own account until the completion of the
distribution of such securities by the Company. The registration rights set
forth herein supersede and replace in their entirety any other registration
rights that any of the Investors may have, all of which registration rights, if
any, are hereby terminated.
SECTION 11. MISCELLANEOUS.
11.1 NO TRANSFER OF SECURITIES BY INVESTOR. None of the
Investors will distribute (including, without limitation, any distribution to
the shareholders or partners of any Investor pursuant to the terms of its
governing instruments or any distribution in connection with the dissolution of
any Investor), sell, resell, assign, pledge, mortgage, hypothecate, or otherwise
transfer or dispose of the Securities (or any portion thereof) (any such event
or combination thereof being hereinafter referred to as a "Transfer") without
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first furnishing to the Company an opinion of counsel, which opinion shall be
satisfactory in form, scope and substance to the Company and its counsel in
their sole discretion, that registration under the Securities Act or any
applicable state securities laws is not required in connection with any proposed
Transfer.
11.2 LEGEND ON CERTIFICATES. Each certificate representing the
Securities shall bear a legend consistent with the representations, warranties
and agreements set forth herein, which shall read substantially as follows:
"THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND HAVE BEEN ACQUIRED BY
THE ISSUEE FOR INVESTMENT
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PURPOSES. SAID SHARES MAY NOT BE SOLD OR TRANSFERRED UNLESS (A) THEY
HAVE BEEN REGISTERED UNDER SAID ACT, OR (B) THE TRANSFER AGENT (OR THE
COMPANY IF THEN ACTING AS ITS TRANSFER AGENT) IS PRESENTED WITH EITHER
A WRITTEN OPINION SATISFACTORY TO COUNSEL FOR THE COMPANY OR A
'NO-ACTION' OR INTERPRETIVE LETTER FROM THE SECURITIES AND EXCHANGE
COMMISSION TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE CIRCUMSTANCES OF SUCH SALE OR TRANSFER."
11.3 PAYMENT OF EXPENSES. Each of the Investors and the
Company will pay all legal, accounting and other fees and expenses which such
party incurs in connection with this Agreement and the transactions contemplated
hereby, and none of the expenses of the Investors shall be paid by the Company.
However, if this Agreement is terminated pursuant to Section 11.5 or if the
failure to satisfy a condition of Closing arises out of the breach, existing at
the time of the execution of this Agreement, of a representation or warranty
contained in this Agreement, the party terminating this Agreement shall be
entitled to receive from the breaching party or parties the expenses of the
terminating party incurred between the date of this Agreement and the date of
termination.
11.4 TERMINATION BY MUTUAL CONSENT. This Agreement may be
terminated at any time on or prior to the Closing Date by mutual consent of the
Investors and the Company. No termination of this Agreement shall affect the
exercise of the Modified Warrants as herein provided.
11.5 TERMINATION FOR BREACH. The Company may terminate its
obligations under this Agreement at any time prior to the Closing Date if any of
the Investors shall have breached any of their representations, warranties or
other obligations under this Agreement in any material respect. The Investors
may likewise terminate their obligations under this Agreement at any time prior
to the Closing Date if the Company shall have breached any of its
representations, warranties or other obligations under this Agreement in any
material respect. Such termination may be effected by written notice from either
the Company or the Investors, as appropriate, citing the reasons for termination
and shall not subject the terminating party to any liability for any valid
termination. No termination of this Agreement shall affect the exercise of the
Modified Warrants as herein provided.
11.6 BROKERS' AND FINDERS' FEES. The Investors as a group and
the Company each to the other represent and warrant that all negotiations
relative to this Agreement have been carried on by them directly without the
intervention of any person, firm, corporation or other entity who or which may
be entitled to any brokerage fee or other commission from the other in respect
of the execution of this Agreement or the consummation of the transactions
contemplated hereby, and each of them shall indemnify and hold the other or any
affiliate of them harmless against any and all claims, losses, liabilities or
expenses which may be asserted against any of them as a result of any dealings,
arrangements or agreements by the indemnifying party with any such person, firm,
corporation or other entity.
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11.7 ASSIGNMENT AND BINDING EFFECT. This Agreement may not be
assigned prior to the Closing by any party hereto without the prior written
consent of the other parties. Subject to the foregoing, all of the terms and
provisions of this Agreement shall be binding upon and inure to the benefit of
and be enforceable by the heirs, executors, legal representatives, successors
and assigns of each of the Investors and by the successors and assigns of the
Company.
11.8 WAIVER. Any term or provision of this Agreement may be
waived at any time by the party entitled to the benefit thereof by a written
instrument executed by such party.
11.9 NOTICES. Any notice, request, demand, waiver, consent,
approval or other communication which is required or permitted hereunder shall
be in writing and shall be deemed given only if delivered personally to the
address set forth below (to the attention of the person identified below) or
sent by telegram or by registered or certified mail, postage prepaid, if to
Company, to: ▇▇▇▇▇ Communications, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇; and if to any of the Investors, to
their addresses set forth on Exhibit A hereto, or to such other address as the
addressee may have specified in a notice duly given to the sender and to counsel
as provided herein. Such notice, request, demand, waiver, consent, approval or
other communication will be deemed to have been given as of the date so
delivered or telegraphed or, if mailed, three Business Days after the date so
mailed.
11.10 TEXAS LAW TO GOVERN. This Agreement shall be governed by
and interpreted and enforced in accordance with the substantive laws of the
State of Texas, without giving effect to the conflict of law rules thereof.
11.11 REMEDIES NOT EXCLUSIVE. Nothing in this Agreement shall
be deemed to limit or restrict in any manner other rights or remedies that any
party may have against any other party at law, in equity or otherwise.
11.12 NO BENEFIT TO OTHERS. The representations, warranties,
covenants and agreements contained in this Agreement are for the sole benefit of
the parties hereto and the Company and their heirs, executors, legal
representatives, successors and assigns, and they shall not be construed as
conferring and are not intended to confer any rights on any other persons.
11.13 CONTENTS OF AGREEMENT. This Agreement, together with any
documents referred to herein, sets forth the entire agreement of the parties
hereto with respect to the transactions contemplated hereby. This Agreement may
not be amended except by an instrument in writing signed by the parties hereto,
and no claimed amendment, modification, termination or waiver shall be binding
unless in writing and signed by the party against whom or which such claimed
amendment, modification, termination or waiver is sought to be enforced.
11.14 SECTION HEADINGS AND GENDER. All section headings and
the use of a particular gender are for convenience only and shall in no way
modify or restrict any of the terms or provisions hereof. Any reference in this
Agreement to a Section or Exhibit shall be deemed to be a reference to a Section
or Exhibit of this Agreement unless the context otherwise expressly requires.
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11.15 COOPERATION. Subject to the provisions hereof, the
parties hereto shall use their best efforts to take, or cause to be taken, such
action, to execute and deliver, or cause to be executed and delivered, such
additional documents and instruments and to do, or cause to be done, all things
necessary, proper or advisable under the provisions of this Agreement and under
applicable law to consummate and make effective the transactions contemplated by
this Agreement.
11.16 SEVERABILITY. Any provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall be ineffective to the extent
of such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11.17 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which is an original and all of which together shall
be deemed to be one and the same instrument. This Agreement shall become binding
when one or more counterparts taken together shall have been executed and
delivered by all of the parties, it not being necessary that any counterpart
hereof be executed by more than one of the parties hereto. It shall not be
necessary in making proof of this Agreement or any counterpart hereof to produce
or account for any of the other counterparts.
[THIS SPACE INTENTIONALLY LEFT BLANK.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
▇▇▇▇▇ COMMUNICATIONS, INC.
By:________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
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▇▇▇▇▇▇ ▇▇▇▇ RETIREMENT PLAN
By:________________________________
Print Name:________________________
Title:_____________________________
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▇▇▇▇▇▇▇▇ ▇. ▇▇▇, as Trustee of the
▇▇▇▇▇▇▇▇ ▇. ▇▇▇ Living Trust
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By:________________________________
▇▇▇▇ ▇. ▇▇▇▇▇
Title:________________________
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