SECURITIES PURCHASE AGREEMENT
by and among
FLEET VENTURE RESOURCES, INC.,
FLEET EQUITY PARTNERS VI, L.P.,
KENNEDY PLAZA PARTNERS
DOBSON COMMUNICATIONS CORPORATION,
an Oklahoma corporation
Dated as of March 19,1996
TABLE OF CONTENTS
ARTICLE I DEFINITIONS
Section 1.1 Definitions.................................................
Section 1.2 Construction................................................
Section 1.3 Payments....................................................
ARTICLE II SALE AND PURCHASE OF PURCHASED SECURITIES
Section 2.1 Sale and Purchase of Purchased Securities...................
Section 2.2 Purchase Price..............................................
Section 2.3 Closing.....................................................
Section 2.4 Use of Proceeds.............................................
ARTICLE III REPRESENTATIONS AND WARRANTIES
Section 3.1 Authority of the Company....................................
Section 3.2 Capitalization; Subsidiaries................................
Section 3.3 Outstanding Equity; Subsidiaries............................
Section 3.4 Reports and Financial Statements;
Section 3.5 Cellular Business...........................................
Section 3.6 Landline Business...........................................
Section 3 7 Absence of Certain Developments.............................
Section 3.8 Indebtedness to and from Officers,
Directors and Others......................................
Section 3.9 Accounts Receivable and Bad Debts...........................
Section 3.10 Taxes.......................................................
Section 3.11 Solvency....................................................
Section 3.12 Title to Assets.............................................
Section 3.13 Real Property Owned.........................................
Section 3.14 Real and Personal Property - Leased.........................
Section 3.15 Proprietary Rights..........................................
Section 3.16 Necessary Property; Condition of Property...................
Section 3.17 Compliance With Law.........................................
Section 3.18 Environmental Compliance....................................
Section 3.19 Litigation..................................................
Section 3.20 No Material Adverse Effect..................................
Section 3.21 Employee Benefit Plans......................................
Section 3.22 Withholding, Contracts, Labor Relations.....................
Section 3.23 Insurance...................................................
Section 3.24 Burdensome Obligations......................................
Section 3.25 Certain Governmental Regulations............................
Section 3.26 Corporate Documents, Books and Records......................
Section 3.27 Transaction Costs...........................................
Section 3.28 Equity Interests............................................
Section 3.29 Disclosure..................................................
Section 3.30 Senior Management Compensation..............................
Section 3.31 Representations and Warranties under
Section 3.32 Small Business Concern......................................
Section 3.33 Machinery and Equipment - Owned and Leased..................
Section 3.34 Necessary Licenses and Permits..............................
ARTICLE IV PURCHASERS' REPRESENTATIONS
Section 4.1 Investment Intent...........................................
Section 4 2 Authorization...............................................
ARTICLE V CONDITIONS TO PURCHASE AND SALE
Section 5.1 Related Agreements..........................................
Section 5.2 Charter Documents; Certificates.............................
Section 5.3 Proof of Corporate or Partnership Action....................
Section 5.4 Legal Opinions..............................................
Section 5.5 Representations and Warranties..............................
Section 5.6 Legality; Governmental and Other
Section 5.7 Stock Split.................................................
Section 5.8 Payment of Certain Fees and Disbursements...................
Section 5.9 Other Closings..............................................
Section 5.10 Key Man Life Insurance......................................
Section 5.11 General.....................................................
Section 5.12 Dobson Note.................................................
ARTICLE VI COVENANTS
Section 6.1 Records and Accounts........................................
Section 6.2 Existence; Subsidiaries; Maintenance
Section 6.3 Insurance...................................................
Section 6.4 Taxes.......................................................
Section 6.5 Inspection of Properties and Books..........................
Section 6.6 Compliance with Laws, Contracts,
Licenses and Permits......................................
Section 6.7 Employee Benefit Plans......................................
Section 6.8 Further Assurances..........................................
Section 6.9 Notices.....................................................
Section 6.10 Distributions...............................................
Section 6.11 Dilution Protection.........................................
Section 6.12 Merger, Consolidation, Sale of Assets
or Other Dispositions.....................................
Section 6.13 Transactions with Affiliates................................
Section 6.14 Sale and Leaseback of Property..............................
Section 6.15 Joint Ventures..............................................
Section 6.16 Investments.................................................
Section 6.17 Senior Management; Compensation.............................
Section 6.18 Compliance with Capital Budget..............................
Section 6.19 Response Actions............................................
Section 6.20 Merger, Consolidation or Other Acquisitions.................
Section 6.21 Charter Amendments..........................................
Section 6.22 Control of Systems..........................................
Section 6.23 Trust Loan Repayment........................................
Section 6.24 Payment of Affiliate Notes..................................
ARTICLE VII REPORTING COVENANTS
Section 7 3
ARTICLE VIII NONCOMPLIANCE EVENTS
ARTICLE IX REGISTRATION AND TRANSFER OF
ARTICLE X EXPENSES; INDEMNITY; MISCELLANEOUS
ARTICLE XI NOTICES.....................................................
ARTICLE XII SURVIVAL OF COVENANTS, AGREEMENTS,
REPRESENTATIONS AND WARRANTIES..............................
ARTICLE XIII AMENDMENTS AND WAIVERS......................................
ARTICLE XIV CONSENT TO JURISDICTION.....................................
ARTICLE XV WAIVER OF JURY TRIAL........................................
ARTICLE XVI GOVERNING LAW...............................................
ARTICLE XVII RIGHT TO PUBLICIZE..........................................
ARTICLE XVIII FURTHER ASSURANCES..........................................
ARTICLE XVIX TIME OF THE ESSENCE.........................................
ARTICLE XX ENTIRE AGREEMENT; COUNTERPARTS;
LIST OF SCHEDULES AND EXHIBITS
SCHEDULE 1 Purchasers
SCHEDULE 1.1 Permitted Liens
SCHEDULE 2 Related Entities
SCHEDULE 3.2 Capital Structure Schedule
SCHEDULE 3.4(a)(i) Historical Financial Statements
SCHEDULE 3.4(a)(ii) Current Financial Statements
SCHEDULE 3.4(a)(iii) Pro Forma Balance Sheet
SCHEDULE 3.4(a)(iv) Projections
SCHEDULE 3.5(c) Pricing of Services
SCHEDULE 3.5(e) Customers
SCHEDULE 3.6(b) Access Lines
SCHEDULE 3.6(d) Capital Improvements Required by State Authorities
SCHEDULE 3.7 Absence of Certain Developments
SCHEDULE 3.8 Certain Indebtedness
SCHEDULE 3.13 Real Property
SCHEDULE 3.14 Leased Property
SCHEDULE 3.17 Compliance with Law
SCHEDULE 3.19 Litigation
SCHEDULE 3.20 Material Adverse Effect
SCHEDULE 3.23 Insurance
SCHEDULE 3.27 Transaction Costs
SCHEDULE 3.30 Senior Management Compensation
SCHEDULE 3.34 Necessary Licenses and Permits
SCHEDULE 6.17 Executive Compensation
EXHIBIT A Form of Certificate of Designation
EXHIBIT B Form of Option Agreement
EXHIBIT C Form of Shareholders' Agreement
EXHIBIT D Form of Texas 2 Option Agreement
EXHIBIT E Form of Opinion of Counsel to the Company
EXHIBIT F Form of Opinion of FCC Counsel to the Company
EXHIBIT G Form of Charter Amendment
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement, dated as of March 19, 1996, is
entered into by and between Dobson Communications Corporation, an Oklahoma
corporation (the "Company"), and each of the Purchasers listed on SCHEDULE 1.
SECTION 1.1. DEFINITIONS. For all purposes of this Agreement the
following terms shall have the meanings set forth in this ARTICLE I.
"AFFILIATE" shall mean, with respect to any Person directly or
indirectly controlling, controlled by or under direct or indirect common
control with the Company, including, without limitation, (a) any Person who
is a director, limited partner or executive officer of the Company or the
beneficial owner of at least 5% of the then outstanding equity interests (on
a fully diluted basis) of the Company (or other specified Person) and Family
Members of any of such Persons, (b) any Person of which the Company (or other
specified Person) or an Affiliate (as defined in clause (a) above) of the
Company (or other specified Person) shall, directly or indirectly, either
beneficially own at least 5% of the then outstanding equity securities (on a
fully diluted basis) or constitute at least a 5% equity participant, and (c)
in the case a specified Person is an individual, Family Members of such
Person; PROVIDED, HOWEVER, that in no event shall any of the Purchasers be
considered an Affiliate of the Company or any Related Entity.
"AGREEMENT" shall mean this Securities Purchase Agreement, as the same
may be amended, supplemented, restated, replaced or otherwise modified, in
each case from time to time and whether in whole or in part.
"ACQUIRING SUBSIDIARY" means the Company's Cellular Subsidiaries that
will acquire the USCC cellular systems.
"BALANCE SHEET DATE" shall have the meaning specified in SECTION 3.4.
"BASIC SUBSCRIBERS" shall have the meaning specified in SECTION 3.5.
"BUDGETS" shall have the meaning specified in SECTION 6.18.
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or any
other day when Fleet is closed for business.
"CAPITAL EXPENDITURES" means capital expenditures determined in
accordance with GAAP, including in any event capital lease obligations.
"CAPITALIZED LEASE OBLIGATION" shall mean any rental obligation which,
under GAAP, is or will be required to be capitalized on the books of the
Company or any Subsidiary, taken at the amount thereof accounted for as
indebtedness (net of interest expense) in accordance with such principles.
"CAPITAL STRUCTURE SCHEDULE" shall have the meaning specified in SECTION
"CELLULAR ACQUISITION" shall mean the acquisition by the Company of
certain cellular systems owned by USCC pursuant to the terms and provisions
of that certain Acquisition Agreement dated as of October 27, 1995 by and
between the Company and USCC.
"CELLULAR SUBSIDIARIES" means the Company's Subsidiaries which own the
cellular systems currently owned by the Company.
"CERTIFICATE OF DESIGNATION" shall mean that certain Certificate of
Designation of the Company providing for the authorization of Class B
Convertible Preferred Stock of the Company, in the form of EXHIBIT A hereto.
"CHARTER" shall include the articles or certificate of incorporation,
statute, constitution, joint venture or partnership agreement or articles or
other organizational document of any Person other than an individual, each as
from time to time amended or modified.
"CHARTER AMENDMENT" shall mean that certain Certificate of Amendment to
Certificate of Incorporation of the Company, providing for the increase in
the number of shares of Common Stock and
Preferred Stock the Company is authorized to issue, in the form of
EXHIBIT G HERETO.
"CLOSING DATE" shall have the meaning specified in SECTION 2.3.
"CODE" shall mean the Internal Revenue Code of 1986, any successor
statute of similar import, and the rules and regulations thereunder,
collectively and as from time to time amended and in effect.
"COMMON SHARES" shall mean the shares of Class A Voting Common Stock of
the Company, $1.00 par value per share, issued or issuable upon conversion of
the Preferred Shares.
"COMPANY" shall mean Dobson Communications Corporation, an Oklahoma
"CONSOLIDATED", "CONSOLIDATED" and "COMBINED" shall mean, with reference
to any financial statement, such financial statements of the Company and each
Subsidiary, if any, consolidated or combined, as the case may be, in
accordance with GAAP.
"CORESTATES FINANCING" shall mean that certain $84,000,000
revolving/term loan facility and that certain $6,000,000 term loan facility
pursuant to that certain Amended and Restated Credit Agreement of even date
herewith by and among CoreStates Bank, N.A., in its capacity as
Administrative Agent and a Bank, the other Banks listed therein, the
Corporate Borrowers listed therein and the Trust Borrowers listed therein, or
any credit agreement evidencing a senior debt facility which replaces the
facility evidenced by such Amended and Restated Credit Agreement.
"CURRENT FINANCIAL STATEMENTS" shall have the meaning specified in
"DECEMBER BALANCE SHEET DATE" shall have the meaning specified in
"DISTRIBUTION" shall mean (a) the declaration or payment of any dividend
of cash or property on or in respect of any shares of any class of capital
stock or other equity security of the Company or any of the Subsidiaries; (b)
the purchase, redemption or other
retirement of any shares of any class of capital stock ___________ security
of the Company or any of the ___________________________ or otherwise; or (c)
any other distribution on or in respect of any shares of any class of capital
stock or other equity security of the Company or any of the Subsidiaries.
"DOBSON" shall mean Everett R. Dobson, an individual residing, on the
date hereof, at 1905 Mission Hills, Edmond, Oklahoma 73038.
"EMPLOYEE BENEFIT PLAN" shall mean the employee benefit plan within the
meaning of Section 3(3) of ERISA maintained or contributed to by the Company
or any ERISA Affiliate, other than a Multiemployer Plan or fringe benefit
plan within the meaning of Section 6039D of the Code maintained or
contributed to by the Company or an ERISA Affiliate.
"ENVIRONMENTAL LAWS" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, the Resources
Conservation and Recovery Act of 1976, as amended, and any applicable
statutes, regulations, rules, ordinances, codes, licenses, permits, orders,
policies, guidelines, by-laws, approvals, plans, authorizations, concessions,
and similar items of all governmental authorities and all applicable
judicial, administrative and regulatory decrees, judgments and orders, any of
which relate to the protection of human health or the environment from the
effects of Hazardous Substances, including, but not limited to, those
pertaining to reporting, licensing, permitting, investigating and remediating
emissions, discharges, releases or threatened releases of Hazardous
Substances into the air, surface water, groundwater or land, or relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Substances.
"ERISA" shall mean the federal Employee Retirement Income Security Act
of 1974, any successor statute of similar import, and the rules and
regulations thereunder, collectively and as from time to time amended and in
"ERISA AFFILIATE" shall mean any Person which is treated as a single
employer with the Company under Section 414 of the Code.
"FAMILY MEMBERS" shall mean, as applied to any Person who is an
individual, a spouse, parent, grandparent, ancestor, descendent,
cousin, sibling or heir thereof and any spouse of any of the foregoing, and
each trust created for the benefit of one or more of such Persons and each
custodian of property of one or more such Persons.
"FCC" shall mean the Federal Communications Commission.
"FEP" shall mean Fleet Equity Partners VI, L.P., a Delaware limited
"FINANCING AGREEMENTS" shall mean this Agreement, the Certificate of
Designation, the Charter Amendment, the Shareholders' Agreement, the Option
Agreement, the Texas 2 Option Agreement and any other agreements, documents
or instruments executed in connection with or pursuant to this Agreement or
any of the foregoing.
"FLEET" shall mean collectively FVR, FEP and KPP.
"FVR" shall mean Fleet Venture Resources, Inc., a Rhode Island corporation.
"GAAP" shall mean generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession, which are applicable to the circumstances as of
the date of determination and which are, as to any Person, consistently
applied to such Person.
"GUARANTEED PENSION PLAN" shall mean any employee pension benefit plan
within the meaning of Section 3(2) of ERISA maintained or contributed to be
the Company or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA,
other than a Multiemployer Plan.
"HAZARDOUS SUBSTANCES" shall mean (but shall not be limited to)
substances that are defined or listed in, or otherwise classified pursuant
to, any applicable Environmental Laws as "hazardous substances," "hazardous
materials" "hazardous wastes" or
"toxic substances," or any other formulation intended to define, list or
classify substances by reason of deleterious properties such as ignitability,
corrosively, reactivity, radioactivity, carcinogenicity, reproductive
toxicity or "EP toxicity," and petroleum and drilling fluids, produced waters
and other wastes associated with the exploration, development, or production
of crude oil, natural gas or geothermal energy.
"HISTORICAL FINANCIAL STATEMENTS" shall have the meaning specified in
"INDEBTEDNESS" shall mean, with respect to any Person, all obligations,
contingent (to the extent required to be reflected in financial statements
prepared in accordance with GAAP) and otherwise, which in accordance with
GAAP should be classified on the balance sheet of such Person as liabilities,
or to which reference should be made by footnotes thereto, including, without
limitation, in any event and whether or not so classified: (a) all debt and
similar monetary obligations of such Person, whether direct or indirect, (b)
all liabilities of such Person secured by any Lien existing on property owned
or acquired subject thereto, whether or not the liability secured thereby
shall have been assumed; (c) all guarantees, endorsements and other
contingent obligations of such Person whether direct or indirect in respect
of Indebtedness or performance of any other Person, including any obligation
to supply funds to or in any manner to invest in, directly or indirectly,
such other Person, to purchase Indebtedness owed by such other Person, or to
assure the owner of Indebtedness owed by such other Person against loss,
through an agreement to purchase goods, supplies or services for the purpose
of enabling such other Person to r-TM-lake payment of the Indebtedness held
by such owner or otherwise, and (d) obligations of such Person to reimburse
issuers of any letters of credit.
"INTANGIBLE PROPERTY" shall have the meaning specified in SECTION 3.20.
"INVESTMENTS" shall mean ____________________, direct or indirect
purchase or other acquisition by such Person of any share of capital stock,
evidence of Indebtedness or other security issued to such Person by any other
Person, (b) any loan, advance or extension of credit to, or contribution to
the capital of, any other Person, (c) any direct or indirect purchase or
acquisition by such Person of the securities or business or integral part of
the business of any other Person, or commitment to make such purchase, and
(d) any other investment in any other Person; PROVIDED, HOWEVER, that the
term "Investment" shall not include (i) trade and customer accounts
receivable for services rendered in the ordinary course of business and
payable in accordance with customary trade terms, and all letters of credit
or other instruments securing or evidencing the same, (ii) advances to
employees for travel expenses, drawing accounts and similar expenditures but
only to the extent all such advances outstanding at any particular time do
not exceeds $25,000, and (iii) stock or other securities acquired in
connection with the satisfaction or enforcement of Indebtedness or claims due
or owing to the Company or any of the Subsidiaries or as security for any
such Indebtedness or claim.
"KPP" means Kennedy Plaza Partners, a Rhode Island general partnership.
"LANDLINE BUSINESS" means the Company's landline telephone business.
"LANDLINE SUBSIDIARIES" means the Company's Subsidiaries through which the
Company conducts the Landline Business.
"LIEN" shall mean (a) any encumbrance, mortgage, pledge, lien, charge or
other security interest of any kind upon any property or assets of any
character, or upon the income or profits therefrom; (b) any acquisition of or
agreement to have an option to acquire any property or assets upon
conditional sale or other title retention agreement, device or arrangement
(including a capitalized lease); or (c) any sale, assignment, pledge or other
transfer for security of any accounts, general intangibles or chattel paper,
with or without recourse.
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect in the
business, assets, properties (tangible and intangible), operations, condition
(financial or otherwise), liabilities or prospects of the Company and the
Subsidiaries, taken as a whole, whether or not in the ordinary course of
business, whether separately or in the aggregate with other occurrences or
developments, and whether insured against or not.
"MULTIEMPLOYER PLAN" shall mean any multiemployer plan within the
meaning of Section 3(37) of ERISA at any time maintained or contributed to by
the Company or any ERISA Affiliate or to which the Company or any ERISA
Affiliate is or was obligated to contribute.
"NONCOMPLIANCE EVENT" shall have the meaning specified in SECTION 8.1.
"OPTION AGREEMENT" shall mean that certain Option Agreement by and among
the Purchasers and Dobson CC Limited Partnership, an Oklahoma limited
partnership, in the form of EXHIBIT B hereto.
"PARTNERSHIP BLOCK" SHALL have the meaning _______________.
"PBGC" shall mean the Pension Benefit Guaranty Corporation created by
Section 4002 of ERISA and any successor entity or entities having similar
"PCS" shall mean personal communications services.
"PERMITTED LIENS" shall mean THE following:
(a) Liens to secure taxes, assessments and other government charges
or claims for labor, material or supplies in respect of obligations not
overdue or due but being contested to the extent permitted by SECTION 6.4;
(b) Deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age pensions
or other social security obligations;
(c) Liens of carriers, warehousemen, mechanics and materialmen, and
other like Liens,
(d) Encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and irregularities in
the title thereto, landlord's or lessor's Liens under leases to which the
Company or any Subsidiary is a party, and other minor Liens or encumbrances
none of which interferes materially with the use of the property affected in
the ordinary conduct of the business of the Company and the Subsidiaries and
which defects do not individually or in the aggregate have a Material Adverse
(e) Any Liens on the assets and property of the Company or the
Subsidiaries existing on the date hereof and set forth on Schedule 1.1.
"PERSON" shall mean an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization, and any government,
governmental department or agency or political subdivision thereof.
"POPS" shall mean the total number of population equivalents in a defined
"PREFERRED SHARES" shall mean the 100,000 shares of Class B Convertible
Preferred Stock of the Company being purchased by the Purchasers pursuant to
"PROJECTIONS" shall have the meaning specified in SECTION 3.4.
"PURCHASE PRICE" shall have the meaning specified in SECTION 2.2.
"PURCHASED SECURITIES" shall mean the Preferred Shares being purchased by
the Purchasers pursuant to this Agreement.
"PURCHASERS" shall mean each Person listed on SCHEDULE 1 together with ____
respective successors and assigns.
"QUALIFIED OPTIONS" shall mean those certain options for the right to
purchase up to 30,166 shares of Class B Common Stock of the Company issued to
key employees acceptable to the Purchasers and in the amounts, at the price and
on other terms and conditions acceptable to the Purchasers.
"RELATED AGREEMENTS" shall mean the Financing Agreements, the documents,
instruments and agreements executed in connection with the CoreStates Financing,
the Cellular Acquisition, the Stock Option Plan and the redemption of all of the
shares of 10% Cumulative, Compounded, Convertible, Redeemable, Class A Preferred
Stock of the Company held by TDS.
"RELATED ENTITIES" shall mean each Subsidiary and each Person listed on
"RESTRICTED PAYMENT" shall mean any payment to any Affiliate of the Company
or any of its Subsidiaries in respect of any Indebtedness owed by, or other
obligations of, the Company or such Subsidiary to such Affiliate.
"RETURNS" shall have the meaning specified in SECTION 3.10.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Securities and
Exchange Commission thereunder, all as the same shall be in effect at the time.
"SHAREHOLDERS' AGREEMENT" shall mean that certain Shareholders' Agreement,
dated as of the date hereof, by and among the Company, the Purchasers and
certain other stockholders of the Company, in the form of EXHIBIT C hereto, as
the same may be amended, supplemented, restated, replaced or otherwise modified,
in each case from time to time and whether in whole or in part.
"SUBSIDIARY" shall mean any Person listed on SCHEDULE 3.2 and (a) any
corporation in which the Company or such Person, directly or indirectly, owns
more than fifty percent (50%) of the outstanding capital stock or other equity
interests of the class or classes having general voting power under ordinary
circumstances to elect at least a majority of the directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency); (b) any partnership, association, joint venture
or other unincorporated organization or entity with respect to which the Company
or such Person, directly or indirectly, owns equity securities in an amount
sufficient to control the management of such partnership, association, joint
venture or other unincorporated organization or entity; and (c) any corporation,
partnership, association, joint venture or other unincorporated organization or
entity in which the Company or such Person, directly or indirectly, has more
than a fifty percent (50%) equity interest
"SYSTEMS" means the cellular systems currently owned by the Company.
"TAXES" shall have the meaning specified in SECTION 3.10.
"TDS" means TDS Oklahoma Holdings, Inc., an Oklahoma corporation.
"TEXAS 2 EVENT" means the purchase by the Company of the entire interest in
Texas RSA 2 Limited Partnership, a Texas limited partnership, formed pursuant to
that certain Limited Partnership Agreement dated August 13, 1989, as amended,
which is not owned by the Company as of the date hereof (other than the interest
owned by Southwestern Bell Mobil Systems, Inc.) for a purchase price less than
or equal to $7.5 million and as such other terms and conditions as are
reasonably satisfactory to holders of at least 50% of the outstanding Purchased
"TEXAS 2 OPTION AGREEMENT" shall mean that certain Option Agreement by and
among the Purchasers and the Company, in the form of EXHIBIT D hereto.
"TRANSACTION COSTS" shall have the meaning specified in SECTION 3.27.
"TRUST LOAN" shall mean that certain $6 million term loan to the Everett R.
Dobson Irrevocable Family Trust, Stephen T. Dobson Irrevocable Family Trust and
Robin L. Dobson Irrevocable Family Trust pursuant to the CoreStates Financing.
"TRUSTS" shall mean the trusts referred to in the definition of Trust Loan.
"TWELVE-MONTH INCOME STATEMENT" shall have the meaning specified in SECTION
"USCC" shall mean United States Cellular Corporation, a Delaware
"USCC ENTITIES" means the sellers of the USCC cellular systems.
SECTION 1.2. CONSTRUCTION. Unless the context of this Agreement clearly
requires otherwise (i) references to the plural include the singular and to the
singular include the plural, (ii) the term "including" is not limiting, and
(iii) the term "or" has
the inclusive meaning represented by the term "and/or". The terms "hereof',
"herein", "hereby", "hereunder" and similar terms in this Agreement refer to
this Agreement as a whole and not to any particular provision of this
Agreement. Article, Section, Subsection, clause, Schedule and Exhibit
references are to Articles, Sections, Subsections, clauses, Schedules and
Exhibits (as each such Schedule or Exhibit may be amended, modified or
supplemented from time to time) of this Agreement unless otherwise specified.
SECTION 1.3. PAYMENTS. All payments required to be made hereunder by the
Company to any Purchaser shall be made by the Company on the applicable due date
to such Purchaser in U.S. dollars in immediately available funds for credit to
such Purchaser's account set forth on SCHEDULE 1 or to such other account as
such Purchaser may designate in writing to the Company. All payments required to
be made hereunder by a Purchaser to the Company shall be made by such Purchaser
on the applicable due date to the Company in U.S. dollars by transfer of
immediately available funds for credit to the Company's account number:
338200002800 at Bank IV, Nicholas Hills, Oklahoma, ABA number 1039 12480.
SALE AND PURCHASE OF PURCHASED SECURITIES
SECTION 2.1. SALE AND PURCHASE OF PURCHASED SECURITIES. Subject to all of
the terms and conditions hereof and in reliance on the representations and
warranties set forth or referred to herein, the Company agrees to issue and sell
to the Purchasers and each of the Purchasers agrees to purchase from the Company
on the Closing Date the number of Preferred Shares set forth opposite its name
on SCHEDULE 1 hereto.
SECTION 2.2. PURCHASE PRICE. The purchase price (the "Purchase Price")
for the Purchased Securities shall be the aggregate of Ten Million Dollars
SECTION 2.3. CLOSING. The closing of the purchase and sale of the Purchased
Securities contemplated by SECTION 2.1 (the "Closing") will take place at the
offices of Pepper, Hamilton & Scheetz, 3000 Two Logan Square, Eighteenth and
Arch Streets, Philadelphia, Pennsylvania 19103-2799 at 10:00 a.m. on March 19,
1996, or at such other time, date and place as the parties hereto may agree upon
(the "Closing Date").
SECTION 2.4. USE OF PROCEEDS. The proceeds from the sale of the Purchased
Securities will be used solely (i) to finance the Cellular Acquisition, (ii) to
pay the expenses of the transactions contemplated by this Agreement and the
Related Agreements, (iii) as a deposit for the PCS auctions and (iv) the
remaining portion of the proceeds from the sale of Purchased Securities will be
used for working capital purposes. The Company agrees to provide the Purchasers
with reasonable access to the Company's records for purposes of verifying that
the proceeds from the sale of the Purchased Securities are used solely for the
purposes set forth in this SECTION 2.4.
REPRESENTATIONS AND WARRANTIES
It is understood and agreed by and between the parties hereto that, as an
inducement to each Purchaser to enter into this Agreement and to purchase the
Purchased Securities as contemplated by SECTION 2.1, the Company has made to
each Purchaser the representations and warranties hereinafter set forth in this
ARTICLE m, all of which are true and correct on the date hereof and, except as
otherwise indicated, all of which will be true and correct on the Closing Date
as if made on and as of such Closing Date, that the representations and
warranties shall survive the Closing, and that each Purchaser has relied on such
representations and warranties.
SECTION 3.1. AUTHORITY OF THE COMPANY. The Company (a) is a corporation,
duly organized, legally existing and in good standing under the laws of the
State of Oklahoma (b) has the corporate power and authority to own its
properties and carry on its business as now being conducted and is qualified to
do business in every jurisdiction in which the nature of its business or the
ownership or leasing of its property requires such qualification; and (c) has
the corporate power and authority to enter into and perform its obligations
under this Agreement and each of the other Related Agreements to which it is a
party and to undertake the transactions contemplated hereby and thereby. All
necessary and proper corporate action has been taken by the Company with respect
authorization, execution and delivery of this Agreement and the other Related
Agreements to which it is a party and this Agreement and such other Related
Agreements constitute the legal, valid and binding obligations of the Company
enforceable against it in accordance with their terms except to the extent
enforceability may be subject to bankruptcy, insolvency, moratorium and
similar laws affecting the rights of creditors generally or the application
of principles of equity, whether in an action at law or proceeding in equity,
and subject to the availability of the remedy of specific performance or of
any other equitable remedy or relief to enforce any right under any such
agreement. The execution, delivery and performance of this Agreement and the
other Related Agreements to which the Company is a party will not violate any
provision of law applicable to the Company, any order of any court or other
agency of government applicable to the Company, the Company's corporate
charter or by-laws or any indenture, agreement or other instrument to which
the Company is a party or by which it is bound or be in conflict with, result
in a breach of, or constitute (with due notice or lapse of time or both) a
default under, or except as may be provided in this Agreement, result in the
creation or imposition of any Lien upon any of the property or assets of the
Company pursuant to, any such indenture, agreement or instrument. No
registrations, filings, applications, notices, transfers, consents,
approvals, audits, qualifications, waivers or other action of any kind is
required by virtue of the execution and delivery of this Agreement or any of
the other Related Agreements or of the consummation of the transactions
contemplated hereby or thereby.
SECTION 3.2. CAPITALIZATION: RELATED ENTITY. A statement of the capital
structure of the Company and each Related Entity, indicating its authorized
and issued debt and equity interests, and identifying the holders of such
interests, as of the date of this Agreement giving effect to the transactions
contemplated by the Related Agreements, is annexed hereto as SCHEDULE 3.2
(the "Capital Structure Schedule"). The Capital Structure Schedule also
indicates (a) which securities, if any, carry preemptive rights; (b) whether
there are any outstanding subscriptions, warrants, options or other
agreements to purchase any securities; (c) whether the Company or a Related
Entity is obligated to redeem any of its securities, and the details of any
such committed redemption; (d) all commitments, loan agreements or
arrangements by the Company or a Related Entity to incur indebtedness; (e)
any commitment to convert debt into equity interests of the Company or a
Related Entity; (f) capital
call arrangements; and (g) any other agreement, arrangement or plan which
will directly or indirectly affect the capital structure of the Company or a
SECTION 3.3. OUTSTANDING EQUITY; SUBSIDIARIES; BUSINESS. As of the
Closing Date, the only outstanding equity interests of the Company and each
Related Entity will be as described in the Capital Structure Schedule and
owned by the Persons listed on said Schedule, all of which equity interests
(i) have been validly issued in conformity with all applicable state and
federal laws, (ii) are fully paid and non-assessable, and (iii) are free and
clear of all Liens other than the pledge of shares of Common Stock of the
Company in connection with the CoreStates Financing. Except as set forth on
SCHEDULE 2 and SCHEDULE 3.2, the Company has no Subsidiaries nor does it own
or hold of record or beneficially any shares of any class of the capital of
any corporation or any legal or beneficial ownership interest in any general
or limited partnership, association, joint venture or in any other
unincorporated organization or entity. There are no commitments for the
purchase or sale of, and except as set forth on the Capital Structure
Schedule, no options, warrants or other rights to subscribe for or purchase,
any equity securities of the Company or any Related Entity. The Company and
each Related Entity other than Western Financial Services Corp. is engaged
solely in the business of owning, operating or investing in telephone systems
(including long distance) and cellular systems and Western Financial Services
Corp. is engaged in miscellaneous investments, including-TM- real estate.
SECTION 3.4. REPORTS AND FINANCIAL STATEMENTS: UNDISCLOSED LIABILITIES.
(a) Each Purchaser has heretofore been furnished with the following:
(i) true and complete copies of the audited consolidated balance sheet
of the Company as of December 31,1993 and December 31,1994 (the "Balance
Sheet Date") and the related audited statements of earnings, retained
earnings and cash flows for the years then ended, each of such balance
sheets and income statements being attached hereto as SCHEDULE 3.4
(a!(i! (collectively, the "Historical Financial Statements");
(ii) true and complete copies of the unaudited consolidated balance
sheet of the Company at December 31, 1995 (the "December Balance Sheet")
and the related unaudited statement of earnings and cash flow for the
twelve-month period then ended (the "Twelve Month Income Statement, and
together with the December Balance Sheet, the "Current Financial
Statements"), such balance sheet and income and cash flow statements
being attached hereto as SCHEDULE 3.4 (a)(ii);
(iii) the PRO FORMA consolidated balance sheet of the Company as at the
Closing Date, based on the Company's December Balance Sheet, taking into
account all transactions contemplated hereby to ta-TM-e effect on such
date and by the Transaction Documents, such balance sheet being attached
hereto as SCHEDULE 3.4 (a)(iii); and
(iv) the projections of the Company's future performance for the five
fiscal year period ending December 31, 2001, on a consolidated basis,
dated as of January 31, 1996 and attached hereto as SCHEDULE 3.4 (a!(iv!
(b) Each of the Historical and Current Financial Statements delivered
under SECTION 3.4 (a)(i) AND (ii) hereof was prepared in accordance with GAAP
applied on a basis consistent with prior periods except as otherwise stated
therein; each of the balance sheets included in such Historical and Current
Financial Statements fairly presents the financial condition of the Company
and its Subsidiaries as at the close of business on the date thereof; and
each of the statements of income included in such Historical and Current
Financial Statements fairly presents the results of operations of the Company
and its Subsidiaries for the fiscal period then ended. None of the Company or
any of its Subsidiaries has any liabilities or obligations of any nature,
whether absolute, accrued, contingent or otherwise, which are not reflected
or reserved against in the December Balance Sheet except for liabilities and
obligations that have arisen in the ordinary and usual course of business and
consistent with past practice and that individually or in the aggregate do
not have and could not reasonably be expected to have a Material Adverse
(c) The PRO FORMA consolidated balance sheet of the Company referred
to in SECTION 3.4 (a!(iii! has been prepared by management of the Company
taking into consideration the effect of
the transactions contemplated by the Related Agreements, and none of the
Company, the Subsidiaries and their management is aware of any fact which
casts doubt on the accuracy or completeness thereof. Such pro forma
consolidated balance sheet of the Company fairly presents the financial
condition of the Company and its Subsidiaries as of the date hereof taking
into consideration the effect of the transactions contemplated by the Related
(d) The Projections have been prepared in good faith and are based on
what the Company and its management believe to be a reasonable assessment of
the future performance of the Company and its Subsidiaries. All material
assumptions used in the preparation of the Projections are as set forth in
the notes thereto.
SECTION 3.5. CELLULAR BUSINESS.
(a) SYSTEMS. Each Cellular Subsidiary owns, and each Acquiring
Subsidiary as of the Closing will own, free and clear of any Liens except for
Permitted Liens, all right and title to its respective percentage in the
interest in the Systems as set forth in the Capital Structure Schedule. Each
Cellular Subsidiary is licensed, and each Acquiring Subsidiary as of the
Closing will be licensed, by the FCC and by any and all state governmental
authorities to operate a cellular telephone communication systems in each
specific MSA or RSA, as the case may be, in which each such System operates.
(b) OPERATION OF BUSINESS. Each of the Cellular Subsidiaries and
Acquiring Subsidiaries, and, to the best of the Company's knowledge, each of
the USCC Entities, has operated its business in accordance with cellular
industry standards in all material respects. None of the Cellular
Subsidiaries or Acquiring Subsidiaries, and, to the best of the Company's
knowledge, none of the USCC Entities, is in violation of any applicable
order, regulation or requirement relating to its operations which, if
enforced, would materially and adversely affect such Cellular Subsidiary,
Acquiring Subsidiary or USCC Entity, or its respective System.
(c) PRICING OF SERVICES. Attached hereto as SCHEDULE 3.s(c! is a list
of the service packages offered to customers of each of the Systems and the
prices charged therefor.
(d) FCC AND OTHER GOVERNMENTAL REPORTS. All reports required to be
filed with the FCC and other governmental or administrative authorities by
each of the Subsidiaries and Acquiring Subsidiaries, and each of the USCC
Entities, have been timely filed and are accurate and complete in all
(e) CUSTOMERS. SCHEDULE 3.5(e) sets forth the number of customers the
Systems had in service in the aggregate (as categorized by System on SCHEDULE
3 .5(e! hereto) as of January 1, 1996, February 1, 1996 and February 8, 1996.
SECTION 3.6. LANDLINE BUSINESS.
(a) TARIFFS. The regulatory tariffs applicable to the Landline Business
stand in full force and effect in accordance with all of their terms, and
there is no outstanding notice of cancellation or termination or, to the best
of the Company's knowledge after due inquiry, any threatened cancellation or
termination in connection therewith, nor is any Landline Subsidiary subject
to any restrictions or conditions applicable to its regulatory tariffs that
limit or would limit the operation of the Landline Business (other than
restrictions or conditions generally applicable to tariffs of that type).
Each such tariff has been duly and validly approved by the appropriate
regulatory agency. No Landline Subsidiary is in material violation under the
terms and conditions of any such tariff, and there is no basis of any claim
of material violation by any Landline Subsidiary under any such tariff. There
are no applications by any Landline Subsidiary or complaints or petitions by
others or proceedings pending or threatened before the state regulatory
authority relating to the Landline Business or its operations or the
regulatory tariffs. To the best of the Company's knowledge after due inquiry,
there are no material violations by subscribers or others under any such
tariff. A true and correct copy of each tariff applicable to the Landline
Business has been delivered to the Purchasers.
(b) ACCESS LINES. SCHEDULE 3.6(b) sets forth a true and complete list
of the number of access lines of the Landline Business, by exchange, in
service as of January 1, 1996 and February 8, 1996.
(c) RATE BASE. No Landline Subsidiary has any material amount of
inventory, plant or equipment used in the Landline Business that
has been disallowed from rate base or excluded from the revenue calculations
for any pool, and no Landline Subsidiary has received notification that the
FCC or any state regulatory authority or pool administrator proposes to
exclude any material assets from rate base or revenue calculations for the
(d) CAPITAL IMPROVEMENTS REQUIRED BY STATE AUTHORITIES. Except as set
forth in SCHEDULE 3.6(d!, no Landline Subsidiary is required by any state
regulatory authority to make any changes, upgrades or enhancements with
respect to the Landline Business and the Company has no reason to believe
that any such changes, upgrades or enhancements will be so required in the
SECTION 3.7. ABSENCE OF CERTAIN DEVELOPMENTS. Except for entering into
this Agreement and ___________ SCHEDULE 3.7 hereof, since the December
Balance Sheet Date:
(a) Neither the Company nor any Subsidiary has, whether or not in the
ordinary course of business:
(i) issued any capital stock or other equity interest or any
right, option or warrant with respect thereto;
(ii) declared, set aside, paid to a reserve fund or made any
payment or distribution of cash or other property to its shareholders or
equity holders with respect to any class of its capital stock or other equity
interest or purchased or redeemed any shares of its capital stock or other
(iii) suffered any substantial operating loss;
(iv) made any increases in the base compensation, bonuses, paid
vacation time allowed or fringe benefits for its directors, officers,
partners, employees or consultants, except for normal periodic increases in
base compensation for employees made pursuant to established compensation
policies applied on a basis consistent with that of prior years;
(v) suffered damage, destruction or other casualty loss, or
forfeiture of, any property or assets, whether or not covered by insurance,
which has had or may reasonably be expected to have a Material Adverse Effect;
(vi) made any capital expenditures, additions or improvements or
commitments for the same, except those which do not individually exceed
$100,000 in the aggregate;
(vii) except with respect to the CoreStates Financing entered into any
contract, commitment or agreement under which it has outstanding indebtedness
for borrowed money or for the deferred purchase price of property in excess of
$5,000, or has the right or obligation to incur any such indebtedness or
obligation, or made any loan or advance to any Person other than advances to
employees for business expenses not exceeding $2,000 in the aggregate;
(viii) paid any bonuses, deferred or otherwise, or deferred any
compensation to any of its directors, officers, partners or employees;
(ix) made any material change in accounting procedures or practices;
(x) except for Permitted Liens, mortgaged or pledged any of its
properties or assets, tangible or intangible, or subjected them to any Lien;
(xi) entered into any agreement or arrangement granting any rights
to purchase or lease any of its assets, properties or rights or requiring the
consent of any Person to the transfer, assignment or lease of any such
assets, properties or rights; or
(xii) entered into any agreement or understanding to lo any of the
(b) Other than in the ordinary course of business consistent with past
practice, none of the Company nor any Subsidiary has:
(i) sold, leased, subleased, assigned or transferred any of its
tangible or intangible properties or assets, or canceled, waived or
compromised any debts or claims,
(ii) entered into any other material transaction, or any amendment
of any contract, lease, agreement or license which is material to its
(iii) entered into any agreement or understanding to do any of
SECTION 3.8. INDEBTEDNESS TO AND FROM OFFICERS. DIRECTORS AND OTHERS.
Except as set forth on SCHEDULE 3.8, neither the Company nor any Subsidiary
is indebted to any of its directors, officers, partners, managers, employees
or consultants or to any of its Affiliates except for amounts due as normal
salaries, wages or reimbursement of ordinary business expenses or routine
employee advances for expenses not exceeding $50,000 in the aggregate for all
such directors, officers, partners, managers, employees and consultants and
not exceeding $10,000 for any such Person. Except as set forth on SCHEDULE
3.8, no director, officer, partner, manager, employee or consultant of the
Company or any Subsidiary nor any Affiliate of the Company or any Subsidiary,
is now, or on the Closing Date will be, indebted to the Company or any
Subsidiary except for ordinary business expense advances.
SECTION 3.9. ACCOUNTS RECEIVABLE AND BAD DEBTS. All notes and accounts
receivable of the Company and the Subsidiaries shown on the Company's balance
sheets as at the Balance Sheet Date and the December Balance Sheet Date or
thereafter acquired are valid, genuine and subsisting, were acquired in the
ordinary course of business and are subject to no asserted counterclaims,
defenses or setoffs and are current and collectible (subject to reserves
therefor as reflected on said balance sheets). The Company has previously
delivered to the Purchasers a true, complete and accurate list as of March 1,
1996 of any account receivable of the Company or any Subsidiary in excess of
$1,000 which had not been paid within 30 days of the date due therefor, and
the amount thereof which had not been paid within 60 days and 90 days of the
SECTION 3.10. TAXES.(a) The Company and each of its Subsidiaries has
timely filed all federal, state, county, local and foreign income and other
tax returns, reports and declarations (collectively, "Returns") relating to
Taxes which are required by applicable law to be filed. No audits of federal
income tax Returns of the Company or any of its Subsidiaries have been
conducted at any time since the formation of the Company. All Returns,
including any amendments thereto, heretofore filed by the Company or any of
its Subsidiaries, have been prepared with reasonable care and in good faith
and are complete and accurate in all material respects.
(b) The Company and each of its Subsidiaries paid, or where payment is
not required to be made, has made ?d : .,, J ,i_ - ,n ICKIEST nd financial
statements for the payment of, all Taxes in respect of all periods covered
by the Returns and any other taxable period ending on or before the date
hereof. Neither the Company nor any of its Subsidiaries will have any
liability with respect to any Taxes with respect to periods prior to the date
hereof in excess of the amount so paid. No deficiencies for any Tax,
assessment or governmental charge have been asserted or assessed against the
Company or any of its Subsidiaries which have not been paid, settled or
adequately provided for and there is no basis for any such deficiency,
assessment or charge.
(c) As used herein, "Tax" means any of the Taxes and "Taxes" means (A)
all net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, withholding, payroll, employment,
excise, severance, stamp, occupation, premium, property or windfall profits
taxes, or other taxes of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts imposed by any taxing
authority (domestic or foreign) upon the Company with respect to all periods
or portions thereof ending on or before the date hereof and/or (B) any
liability of the Company for the payment of any amounts of the type described
in the immediately preceding clause (A) as a result of being a member of an
affiliated or combined group.
(d) No property or assets of the Company or any Subsidiaries have been
used by any shareholder, officer, director or employee for their personal use
or otherwise in a manner which would increase the Company's liability for
Taxes, and all expense deductions from the Company's income have been proper
and such expenses were incurred for a valid business purpose.
SECTION 3.11. SOLVENCY. Each of the Company and the Subsidiaries is solvent
and has tangible and intangible assets having a fair value in excess of the
amount required to pay its probable liabilities on its existing debts as they
become absolute and matured, and has access to adequate capital for the conduct
of its business and the ability to pay its debts from time to time incurred in
connection therewith as such debts mature. Neither the Company nor any
Subsidiary is contemplating either the fling of a petition by it under any state
or federal bankruptcy or insolvency laws or the liquidating of all or a
substantial portion of its
property, and neither the Company nor any Subsidiary has any knowledge of any
Person contemplating the filing of any such petition against it.
SECTION 3.12. TITLE TO ASSETS. The Company and the Subsidiaries own all
of their respective assets, and have good and marketable title with respect
thereto, reflected in the pro forma consolidated balance sheet of the Company
as at the Closing Date subject to no Liens other than Permitted Liens.
SECTION 3.13. REAL PROPERTY OWNED.(a) SCHEDULE 3.13 sets forth all real
estate owned by the Company or any Subsidiary and a description of the type
of use of each such parcel. All such real estate and the structures located
thereon conform to all existing zoning and other applicable laws and
ordinances and there are no encroachments thereon and there are no
encroachments by the structures located thereon on any adjacent parcel of
real estate. Except for Permitted Liens, the Company or a Subsidiary is the c
al and equitable) of and _________________________. The Company or a
Subsidiary has good and marketable _________________________. The Company or
a Subsidiary of land included in the real estate listed on SCHEDULE 3.13
necessary for the conduct ama operation of the Systems; all utilities and
related services necessary for the conduct and operation of the Systems have
been installed or are otherwise being delivered to such real estate and such
utilities and services were installed or are being delivered to such real
estate pursuant to easements and right-of-way agreements permitting such use.
(b) The premises, improvements and fixtures owned by the Company and
each Subsidiary are structurally sound and have no material defects and are
in good operating condition and repair.
SECTION 3.14. REAL AND PERSONAL PROPERTY - LEASED. Set forth in SCHEDULE
3.14 is a true and accurate description of all real and material personal
property leased by the Company and each Subsidiary, setting forth (a) the
name of the lessor, and (b) a description of the property leased. With
respect to such leases, the property described in such leases is presently
used by the Company or such Subsidiary as indicated in SCHEDULE 3.14 as
lessee under the terms of such leases, and such leases are in full force and
effect, and will be free and clear of all Liens created by the Company or any
Subsidiary except for Permitted Liens, and neither
the Company nor any Subsidiary is in default of the terms of any such lease
nor, to the best of the Company's knowledge, is any lessor in default under
any such lease nor have any events occurred which, with the giving of notice
or the lapse of time, or both, would be a default under any such lease. There
are no developments, to the Company's best knowledge, affecting any of the
leasehold or other interests therein identified in SCHEDULE 3.14 pending or
threatened which might curtail or interfere with the use of such property for
the purpose for which it is now used. The Company has furnished to the
Purchasers a true and correct copy of all leases set fonh in SCHEDULE 3.14.
SECTION 3.15. PROPRIETARY RIGHTS. The Company or a Subsidiary owns or
has legal right to use all patents, trademarks, tradenames, service marks,
logos, copyrights, including applications therefor, inventions, formulas,
methods and processes (all such items being hereinafter referred to as
"Intangible Property") presently used in the operation of the Systems without
any infringement upon the proprietary rights of others. All patents, patent
applications, registered trademarks, trademark applications, trade names,
service marks, logos, licenses and copyrights used or owned by or licensed to
the Company or a Subsidiary in connection with the operation of the Systems
have been duly registered in, filed in, or issued by the United States Patent
Office, United States Register of Copyrights and have been properly
maintained or renewed in accordance with all applicable provisions of
applicable law. No royalties or fees are payable by the Company or any
Subsidiary to any Person by reason of the ownership or use of any of the
Intangible Property. All items of Intangible Property are adequate and
sufficient to permit the Company and each Subsidiary to conduct its business
as presently conducted, and no other rights of any kind in respect of the
Intangible Property are required by the Company or any Subsidiary for its
operations as presently conducted. The Company and each Subsidiary has the
sole and exclusive right to use the Intangible Property and none of the
Company nor any Subsidiary has entered into any licenses, sublicenses or
agreements relating.to the use by any other Person of any Intangible Property
now in effect, and no infringement exists upon the Intangible Property by any
other Person. No charge or ______________________________ as any charge or
___________________________________ to the effect that, nor does the
operation of the business of the Company or any Subsidiary,
infringe upon or conflict in any way with any rights or properties of the
type enumerated above owned or held by any other Person.
SECTION 3.16. NECESSARY PROPERTY; CONDITION OF PROPERTY. The properties
and assets owned by or leased or licensed to the Company and each Subsidiary
and reflected in the Current Financial Statements and any properties and
assets acquired since the December Balance Sheet Date constitute all of the
real and personal properties, tangible and intangible, which are necessary,
used or useful in the conduct of its business in the manner and to the extent
presently conducted and as proposed in the Projections to be conducted by
them. No other material real or personal properties are required for the
conduct of the business of the Company or any Subsidiary as presently
conducted. The real and personal property owned or leased by the Company or
any Subsidiary has no material defects and is in good operating condition and
SECTION 3.17. COMPLIANCE WITH LAW.(a) Except as may be set forth on
SCHEDULE 3.17, neither the Company nor any Subsidiary is in default under, or
in violation of, or has violated (and not cured) any law (including, without
limitation, laws relating to the issuance or sale of securities, antitrust,
occupational safety, the protection of the environment, transportation,
storage or disposal of hazardous waste, anti-pollution and air and water
quality laws), or any material licenses, franchises, permits, authorizations
or concessions granted by, or any judgment, decree, writ, injunction or order
of, any governmental or regulatory authority, applicable to its business or
any of its properties or assets. Neither the Company nor any Subsidiary has
received any notification alleging any violations of any of the foregoing
within the last five years with respect to which adequate corrective action
has not been taken.
(b) Neither the Company nor any Subsidiary has received a notice of
non-compliance from any governmental authority within five years prior to the
date hereof, including, without limitation, citations (i) from the
Environmental Protection Agency (or any agency of any state or foreign
country performing a similar function), and (ii) for material violations of
the Occupational Safety and Health Act.
SECTION 3.18. ENVIRONMENTAL COMPLIANCE.(a) Neither the Company nor any
Subsidiary has generated, used, transported,
treated, stored, released or disposed of, and has not suffered or permitted
anyone else to generate, use, transport, treat, store, release or dispose of
any Hazardous Substance in violation of any Environmental Laws; (b) there has
not been any generation, use, transportation, treatment, storage, release or
disposal of any Hazardous Substance in connection with the conduct of the
Company or any Subsidiary or the use of any property or facility by the
Company or any Subsidiary or to the best of the Company's knowledge, any
nearby or adjacent properties or facilities, which has created or might
reasonably be expected to create any liability under any Environmental Laws
or which would require reporting to or notification of any governmental
entity; (c) no asbestos which is or has some reasonable likelihood of
becoming friable or polychlorinated biphenyl or underground storage tank is
contained in or located at any facility owned, leased or used by the Company
or any Subsidiary; and (d) any Hazardous Substance handled or dealt with in
any way in connection with the business of the Company or any Subsidiary,
whether before or during the ownership by the Company ____________ been and
is being handled or dealt __________________________ any environmental Laws
in accept at the time such activities - are being conducted.
SECTION 3.19. LITIGATION. Except as set forth in SCHEDULE 3.19 hereto,
there is no suit, claim, action, proceeding or investigation pending or
threatened against or affecting the Company or any Subsidiary or any of its
or their respective assets or properties, or the consummation of the
transactions contemplated hereby, at law or in equity or before any
governmental authority or instrumentality or before any arbitrator of any
kind which suit, claim, action, proceeding or investigation seeks damages,
fines and other amounts, or could reasonably be likely to result in damages,
fines and other amounts, against the Company or any of its Subsidiaries.
Except as set forth on SCHEDULE 3.19, none of the Company or any of its
Subsidiaries has been a party to any such suit, claim, action, proceeding or
investigation during the past two years involving its business, assets or
properties which suit, claim, action, proceeding or investigation seeks
damages, fines and other amounts, or has resulted in the imposition of
damages, fines and other amounts, against the Company or any of its
Subsidiaries in excess of $50,000 in each case, nor has any such suit, claim,
action, proceeding or investigation been threatened. Except as set forth on
SCHEDULE 3.19, none of the Company nor any of its Subsidiaries is a party to
or subject to any judgment, order, writ,
injunction or decree affecting it or any of its assets or properties. No
judgment, decree or order of any court, board or other governmental or
administrative agency or arbitrator is currently outstanding against the
Company, any of its Subsidiaries or their respective
SECTION 3.20. NO MATERIAL ADVERSE EFFECT. Except as set forth on
SCHEDULE 3.20, since the December Balance Sheet Date, there has occurred no
Material Adverse Effect and the Company has no knowledge of any occurrence or
development which might reasonably be expected to result in a Material
SECTION 3.21. EMPLOYEE BENEFIT PLANS.
(a) IN GENERAL. Each Employee Benefit Plan has been maintained and
operated in compliance in all material respects with the provisions of ERISA
and, to the extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions. The Company has
heretofore delivered to each of you the most recently completed annual
report, Form 5500, with all required attachments, and actuarial statement
required to be submitted under Section 103(d) of ERISA, with respect to each
Guaranteed Pension Plan. There are no pending or threatened claims, lawsuits,
actions or arbitrations which have been instituted or asserted with respect
to any Employee Benefit Plan (other than routine claims for benefits) or any
(b) TERMINABILITY OF WELFARE PLANS. Under each Employee Benefit Plan
which is an employee welfare benefit plan within the meaning of Section 3(1)
or Section 3(2)(B) of ERISA, no benefits are due unless the event giving rise
to the benefit entitlement occurs prior to plan termination (except as
required by Title I, Part 6 of ERISA). The Company or an ERISA Affiliate, as
appropriate, has reserved the right in its discretion to terminate each such
Plan and the benefits provided thereunder at any time (or at any time
subsequent to the expiration of any __________________ bargaining agreement.
(c) GUARANTEED PENSION PLANS. Each contribution required to be made to
a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien
provisions of Section 302(f) of ERISA, or otherwise, has been timely made. No
waiver of an accumulated funding deficiency or extension of amortization
periods has been received with respect to
any Guaranteed Pension Plan. No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by the
Company or any ERISA Affiliate with respect to any Guaranteed Pension Plan,
and there has not been any ERISA Reportable Event (other than an Event as to
which the requirement of 30 days notice has been waived), or any other event
or condition which presents a material risk of termination of any Guaranteed
Pension Plan by the PBGC. Based on the latest valuation of each Guaranteed
Pension Plan (which in each case occurred within twelve months of the date of
this representation) and on the actuarial methods and assumptions employed
for that valuation, the aggregate benefit liabilities of each such Guaranteed
Pension Plan within the meaning of Section 4001 of ERISA did not exceed the
aggregate value of the assets of all such Plans.
(d) MULTIEMPLOYER PLANS. None of the Company or any ERISA Affiliate has
incurred any material liability (including contingent or secondary liability)
to any Multiemployer Plan as a result of a complete or partial withdrawal
from such Multiemployer Plan under Section 4201 of ERISA or as a result of a
sale of assets described in Section 4204 of ERISA.
SECTION 3.22. WITHHOLDING, CONTRACTS, LABOR RELATIONS. The Company and
each Subsidiary has withheld all amounts required by law or agreement to be
withheld by it from the wages, salaries and other payments to its employees
and is not liable for any arrears of wages or any taxes or penalties for
failure to comply with any of the foregoing. Neither the Company nor any
Subsidiary is a party to any written employment agreement, arrangement or
understanding with any of its officers, employees, partners or shareholders.
There are no collective bargaining agreements covering any of the employees
of the Company or any Subsidiary. Neither the Company nor any Subsidiary has
breached or otherwise failed to comply in any material respect with any
provision of any collective bargaining agreement or other labor union
contract applicable to any of its employees. No consent of any union (or any
similar group or organization) is required in connection with the
consummation of the transactions contemplated hereby. There are no pending,
threatened or anticipated (a) employment discrimination charges or complaints
against or involving the Company or any Subsidiary, before any federal,
state, or local board, department, commission or agency, (b) unfair labor
practice charges or complaints, disputes or grievances affecting the Company
or any Subsidiary, (c)
union representation petitionsrespecting the employees of the Company or any
Subsidiary, (d) efforts being made to organize any of the employees of the
Company or any Subsidiary, or (e) strikes, slow downs, work stoppages, or
lockouts or threats thereof affecting the Company or any Subsidiary.
SECTION 3.23. INSURANCE. SCHEDULE 3.23 contains a description of all
policies of title, liability, fire, worker's compensation and other forms of
insurance (including bonds) insuring the properties, assets and operations of
the business of the Company and each Subsidiary are in full force and effect,
have been underwritten by unaffiliated insurers and are sufficient for all
applicable requirements of ______. All such policies shall continue in full
force and effect _________________________ with respect to
_______________________________________ which would have been covered by such
policies prior to the Closing Date.
SECTION 3.24. BURDENSOME OBLIGATIONS. Neither the Company nor any of its
Subsidiaries is party to or bound by any agreement, deed, lease or other
instrument or subject to any order, writ, injunction or decree or other
action of any court or governmental department, commission, bureau, board or
other administrative agency or official, or any Charter or other corporate or
contractual restriction, which is so unusual or burdensome as could
reasonably be expected to affect or impair the business, assets, financial
condition or prospects of the Company and its Subsidiaries taken as a whole
in the foreseeable future. None of the Company or its Subsidiaries is a party
to any contract or agreement with any Affiliate the terms of which are not
commercially reasonable or are less favorable to it than it would obtain in a
comparable arm's length transaction with a Person other than an Affiliate at
the time entered into.
SECTION 3.25. CERTAIN GOVERNMENTAL REGULATIONS. Neither the Company nor
any Subsidiary is a "holding company", or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is the Company
or any of its Subsidiaries a "registered investment company", or an
"affiliated person" or a "principal underwriter" of a "registered investment
company", as such terms are defined in the Investment Company Act of 1940, as
SECTION 3.26. CORPORATE DOCUMENTS, BOOKS AND RECORDS. (a) Complete and
correct copies of the Charter and by-laws, and of all amendments thereto, of
the Company and each Related Entity have been previously delivered to the
Purchasers by the Company, and no changes in said documents will be made on
or before the Closing Date. The books and records of the Company and each
Subsidiary accurately reflect the transactions to which the Company and each
Subsidiary is a party or by which its properties are subject or bound, and
such books and records have been properly kept and maintained.
(b) The financial records, ledgers, account books and other accounting
records of the Company, the Cellular Subsidiaries, the Acquiring Subsidiaries
and the Landline Subsidiaries, are current, correct and complete in all
material respects and, if required by applicable law, conform in all material
respects with the rules and regulations of the FCC and any applicable state
SECTION 3.27. TRANSACTION COSTS. Except as set forth on SCHEDULE 3.27,
there are no Transaction Costs, as defined below, that will be payable by the
Company or any Subsidiary with respect to the transactions contemplated by
this Agreement or any Related Agreement. The term "Transaction Costs" shall
mean all of the costs, fees, and expenses incurred by the Company or any
Subsidiary in connection with the transactions contemplated by this Agreement
or any other Related Agreement, as set forth in SCHEDULE 3.27, including
without limitation, broker's, finder's or placement fees or commissions,
attorneys' fees and fees of other professionals.
SECTION 3.28. EQUITY INTERESTS. The Purchased Securities issued to the
Purchasers pursuant to SECTION 2.1 have been duly authorized and issued, are
______________________ assessable _________________________________________
the equity interests of the Company on a fully diluted basis.
SECTION 3.29. DISCLOSURE. No representation, warranty or statement made
in this Agreement or any other Related Agreement or any agreement,
certificate, statement or document furnished by or on behalf of the Company
or any Subsidiary in connection herewith or therewith contains any untrue
statement of material fact or omits to state a material fact necessary in
order to make the
statements contained herein or therein, in light of the circumstances in which
they were made, not misleading.
SECTION 3.30. SENIOR MANAGEMENT COMPENSATION. SCHEDULE 3.30
accurately sets forth the annual compensation, including, without limitation,
advisor, consultant, employee fees, salaries, bonuses and other amounts paid
by the Company or any Related Entity, of each officer of the Company and each
employee of the Company who was paid in excess of $50,000 in any year for
each of the 1994 and 1995 fiscal years and as projected for the 1996 fiscal
SECTION 3.31. REPRESENTATIONS AND WARRANTIES UNDER RELATED AGREEMENTS.
All representations and warranties made by the Company or any of its
Subsidiaries in any of the Related Agreements or in the certificates
delivered in connection therewith are true and correct in all respects as of
the date hereof with the same force and effect as though made on and as of
the date hereof, and such representations and warranties are hereby confirmed
to the Purchasers and made representations and warranties of the Company
hereunder as fully as if set forth herein. To the best of the Company's
knowledge, all representations and warranties made in the Related Agreements
by or on behalf of any party thereto other than the Company or any of its
Subsidiaries are true and correct.
SECTION 3.32. SMALL BUSINESS CONCERN. The Company, together with its
"affiliates" (as defined in 13 CFR 121.401), qualify as a "small business
concern" within the meaning of the Small Business Investment Act of 1958, as
amended, and as a "small concern" within the meaning of the rules and
regulations thereunder pertaining to financing by small business investment
companies. The Company and its Subsidiaries conduct their business in all
respects and maintains their properties and facilities in such a manner that
the financing and financial assistance provided by the Purchasers will comply
with 13 CFR 107.901 The Company acknowledges that FVR and FEP are federal
licensees under the Small Business Investment Act of 1958, as amended.
SECTION 3.33. MACHINERY AND EQUIPMENT-OWNED AND LEASED. Each item of
machinery and equipment owned or leased by the Company and each Subsidiary
which is material to the conduct of the Company's or any Subsidiary's
business is in good repair and is in good working order (subject to ordinary
wear and tear).
SECTION 3.34. NECESSARY LICENSES AND PERMITS. The Company and each
Subsidiary has all licenses, permits, consents, concessions and other
authorizations of governmental, regulatory or administrative agencies or
authorities, whether foreign, federal, state, or local, required to own and
lease its Properties and assets and to conduct its business as now conducted.
Schedule 3.34 sets forth a true and accurate description of each license
issued by the _____________________ state governmental authorities in
connection with the operation of the Systems and the Landline Business. All
FCC licenses are in full force and effect and there are no pending
modifications, amendments or revocation proceedings which would adversely
affect the operation of any of the Systems. All fees due and payable to
governmental authorities pursuant to the FCC licenses have been paid and no
event has occurred with respect to the FCC licenses held by the Cellular
Subsidiaries or to be acquired by the Acquiring Subsidiaries, which, with the
giving of notice or the lapse of time or both, would constitute grounds for
revocation thereof. Each of the Cellular Subsidiaries and Acquiring
Subsidiaries and, to the best of the Company's knowledge, each of the USCC
Entities, is in compliance in all material respects with the terms of the FCC
licenses, as applicable, and there is no condition, event or occurrence
existing, nor is there any proceeding being conducted of which the Company
has received notice, nor, to the Company's knowledge, is there any proceeding
threatened, by any governmental authority, which would cause the termination,
suspension, cancellation or nonrenewal of any of the FCC licenses, or the
imposition of any penalty or fine by any regulatory authority. Except as
specified in SCHEDULE 3.34, no registrations, filings, applications, notices,
transfers, consents, approvals, audits, qualifications, waivers or other
action of any kind is required by virtue of the execution and delivery of
this Agreement, or of the consummation of the transactions contemplated
hereby or by the Related Agreements (a) to avoid the loss of any such
license, permit, consent, concession or other authorization or any asset,
property or right pursuant to the terms thereof, or the violation or breach
of any Law applicable thereto or (b) to enable the Company or any Subsidiary
to hold and enjoy the same after the Closing Date in the conduct of its
business as conducted prior to the Closing Date.
SECTION 4.1. INVESTMENT INTENT. Each Purchaser hereby represents and
warrants to the Company that it is acquiring the Purchased Securities to be
purchased by it pursuant to SECTION 2.1 for investment and not with a view
towards the sale or distribution of its rights hereunder or thereunder.
SECTION 4.2. AUTHORIZATION. Each Purchaser represents that this
Agreement and the other Related Agreements to which it is a party have been
executed by a duly authorized Person on its behalf and the execution,
delivery and performance hereof and thereof have been duly authorized by all
CONDITIONS TO PURCHASE AND SALE
Each Purchaser's obligation to purchase the Purchased Securities
pursuant to SECTION 2.1 is subject to compliance by the Company with its
agreements contained herein and in each other Related Agreement, and to the
satisfaction, on or prior to the Closing Date, of the following conditions:
SECTION 5.1. RELATED AGREEMENTS. Each of the Related Agreements shall
have been executed and delivered on the Closing Date in a form satisfactory
to the Purchasers. All covenants, agreements and conditions contained in the
Related Agreements which are to be performed or complied with on or prior to
the Closing Date shall have been performed or complied with in all material
SECTION 5.2. CHARTER DOCUMENTS: CERTIFICATES. The Purchasers shall have
received (a) from the Company and each Subsidiary a copy, certified by the
relevant governmental authority in which it is incorporated or registered as
a limited partnership to be true and complete as of a date no more than 10
days prior to the Closing Date, of its articles or certificate of
incorporation or certificate of limited partnership, as the case may be, (b)
from the Company and each Subsidiary that is or corporation a copy, certified
by its duly authorized officer to be true and complete as of the Closing
Date, of the by-laws thereof; and (c) from the Company and each Subsidiary a
certificate, dated not more than ten days prior to the Closing Date, of the
relevant governmental authority or other appropriate official of each state
in which it
is incorporated, registered as a limited partnership or qualified to do
business, as to such Person's partnership or corporate good standing in such
state or qualification to do business, as the case may be. The Purchasers
shall have received from the Company an incumbency certificate, dated the
Closing Date, signed by a duly authorized officer thereof and giving the name
and bearing a specimen signature of each individual who shall be authorized
to sign, in the name and on behalf of the Company, this Agreement and each
other Related Agreement to which the Company is or is to become a party.
SECTION 5.3. PROOF OF CORPORATE OR PARTNERSHIP ACTION. The Purchasers
shall have received from the Company copies certified by a duly authorized
representative thereof to be true and complete as of the Closing Date, of the
records of all corporate action taken to authorize the execution, delivery
and performance of this Agreement and each other Related Agreement to which
the Company is a party.
SECTION 5.4. LEGAL OPINIONS. The Purchasers shall have received from
Pate, Kempf & Knarr, counsel to the Company, a favorable opinion
substantially in the form of EXHIBIT E, and from Wilkinson, Barker, Knauer &
Quinn, FCC Counsel to the Company, a favorable opinion substantially in the
form of EXHIBIT F.
SECTION 5.5. REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained or incorporated by reference herein shall be true and
correct in all respects on and as of the Closing Date with the same force and
effect as though made on and as of the Closing Date except for those
representations and warranties which relate specifically to a particular date
provided that such representations and warranties were true and correct in
all respects as of such date; no event or condition shall have occurred or
would result from the issuance of any of the Preferred Shares which would be
a Noncompliance Event, and the Company shall have performed and complied with
all conditions and agreements required to be performed or complied with by it
______________ and the Purchasers shall have received on the Closing Date a
certificate to these effects signed by the Company.
SECTION 5.6. LEGALITY; GOVERNMENTAL AND OTHER AUTHORIZATIONS. The
purchase and sale of the Preferred Shares pursuant to SECTION 2.1 shall not
be prohibited by any law or governmental order or
regulation, and shall not subject any Purchaser to any penalty, special tax,
or other onerous condition. All necessary consents, approvals, licenses,
permits, orders and authorizations of, and registrations, declarations and
filings with, any governmental or administrative agency or of or with any
other Person, with respect to any of the transactions contemplated by this
Agreement or any other Related Agreement, shall have been duly obtained or
made, as the case may be, and shall be in full force and effect.
SECTION 5.7. STOCK SPLIT. Prior to the Closing Date the Company shall
have effected a stock split with respect to its outstanding shares of Common
Stock so that the Common Stock Shareholders of the Company immediately prior
to the Closing shall own an aggregate of 473,152 shares of Class A Common
SECTION 5.8. PAYMENT OF CERTAIN FEES AND DISBURSEMENTS. The Purchasers
shall have been reimbursed for all reasonable fees, costs and expenses
(including, but not limited to, legal and accounting fees, costs and
expenses) incurred by them through the Closing Date in connection with the
transactions contemplated by this Agreement and the other Related Agreements.
SECTION 5.9. OTHER CLOSINGS. The closing relating to the Cellular
Acquisition, the CoreStates Financing and the redemption of all of the shares
of 10% Cumulative, Compounded, Convertible, Redeemable Class A Preferred
Stock of the Company held by TDS shall occur simultaneously with the Closing
on terms and conditions satisfactory to the Purchasers.
SECTION 5.10. KEY MAN LIFE INSURANCE. The Company shall have obtained a
key man life insurance policy in a face amount of not less than Ten Million
Dollars ($10,000,000) on the life of Dobson, the proceeds of which shall be
divided equally between the Banks (as defined in the Financing Agreement) on
one hand and the Purchasers on the other hand. The dollar amount, terms and
issuer of such policy shall be acceptable to the Purchasers and $5,000,000 of
such policy shall be assigned on the Closing Date to the Purchasers and
$5,000,000 of such policy shall be assigned on the Closing Date to the Banks.
SECTION 5.11. GENERAL. All instruments and corporate and partnership
proceedings in connection with the transactions contemplated by this
Agreement and the other Related Agreements
shall be satisfactory in form and substance to the Purchasers, and the
Purchasers shall have received copies of all documents, including, without
limitation, records of corporate or other proceedings, opinions of counsel
and consents which the Purchaser may have requested in connection therewith
SECTION 5.12. DOBSON NOTE. Dobson shall have executed and delivered a
promissory note to the Company ________ principal amount of $1,400,000, which
promissory note shall _________ conditions satisfactory to the Purchasers.
The Company covenants that while any of the Purchased Securities or any
of the Common Shares are held by any Purchaser, it will comply, and the
Company will cause each of the Subsidiaries to comply, with the following
provisions unless otherwise consented to in writing by the Purchasers:
SECTION 6.1. RECORDS AND ACCOUNTS. Each of the Company and the
Subsidiaries will keep true and accurate records and books of account in
which full, true and correct entries will be made in accordance with GAAP and
in all other respects consistent with industry practices.
SECTION 6.2. EXISTENCE: RELATED SECURITIES; MAINTENANCE OF PROPERTIES.
Each of the Company and the Related Entities will preserve and keep in full
force and effect and in good standing its corporate or partnership existence,
as the case may be, rights and franchises except for any Related Entity which
is combined or merged with and into another Related Entity or the Company.
The Company shall at all times own, directly or indirectly, the equity
interest in each Related Entity as reflected in the Capital Structure
Schedule except for any Related Entity which is combined or merged with and
into another Related Entity or the Company. The Company and the Related
Entities will not engage in any business or business ventures other than (a)
those presently conducted by such Person, (b) those businesses reasonably
ancillary or similar thereto and (c) those businesses which require
investments by such Person of less than $50,000 in the aggregate. Each of the
Company and the Related Entities will maintain all of its properties used
or useful in the conduct of its business in conformity with industry
standards and cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company
may be necessary so that the business carried on is consistent with industry
SECTION 6.3. INSURANCE. Each of the Company and the Subsidiaries will
maintain with financially sound and reputable insurance companies, funds or
underwriters insurance of the kinds, covering the risks and in the relative
proportionate amounts usually carried by reasonable and prudent companies
conducting businesses similar to that of the Company and the Subsidiaries.
SECTION 6.4. TAXES. Each of the Company and the Subsidiaries will pay
and discharge, or cause to be paid and discharged, before the same shall
become overdue, all Taxes, assessments and other governmental charges imposed
upon it and its real properties, sales and activities, or any part thereof,
or upon the income or profits therefrom, as well as all claims for labor,
materials or' supplies, which if unpaid might by law become a Lien upon any
of their properties; PROVIDED, HOWEVER, that any such Tax, assessment,
charge, levy or claim need not be paid if the validity or amount thereof
shall currently be contested in good faith by appropriate proceedings and if
the Company or the applicable ____________ have set aside on its books
adequate reserves with _____________________; PROVIDED, FURTHER, that the
company and the applicable Subsidiary will pay or cause to be paid all such
Taxes, assessments, charges, levies or claims forthwith upon the commencement
of foreclosure on any Lien which may have attached as security therefor.
SECTION 6.5. INSPECTION OF PROPERTIES AND BOOKS. Each of the Company and
the Subsidiaries shall permit each Purchaser or any of its designated
representatives, at the Company's cost, to visit and inspect any of its
properties, to examine its books of account (and to make copies thereof and
extracts therefrom), and to discuss its affairs, finances and accounts with,
and to be advised as to the same by, officers or partners of such Persons,
all at such times and intervals as such Purchaser may reasonably request.
SECTION 6.6. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES AND PERMITS. Each
of the Company and the Subsidiaries will comply with (a) all FCC laws and
regulations, all Oklahoma Corporations
Commission laws and regulations and all other material laws and regulations
wherever its business is conducted, (b) the provisions of its Charter and
by-laws, (c) the Franchises, Necessary Contracts and all other material
agreements and instruments by which it or any of its properties may be bound
(including, without limitation, the Related Agreements and the agreements,
documents and instruments executed and delivered by it in connection with the
CoreStates Financing), (d) all applicable decrees, orders and judgments, and
(e) all required FCC and Oklahoma Corporations Commission approvals, permits
and licenses and all other material approvals, permits and licenses. If at
any time any authorization, consent, approval, permit or license from any
officer, agency or instrumentality of any government shall become necessary
or be required in order that any of the Company or the Subsidiaries may
fulfill any of their respective obligations hereunder, each of the Company
and the Subsidiaries will promptly take or cause to be taken all reasonable
steps within its power to obtain such authorization, consent, approval,
permit or license and furnish the Purchasers with evidence thereof.
SECTION 6.7. EMPLOYEE BENEFIT PLANS. Neither of the Company nor any
(a) engage in any "prohibited transaction" within the meaning of
Section 406 of ERISA or Section 4975 of the Code,
(b) permit any Guaranteed Pension Plan to incur an "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA, whether or not
such deficiency is or may be waived,
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of the
Company or any of its Subsidiaries pursuant to Section 302(f or Section 4068
of ERISA; or
(d) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of Section 4001 of ERISA) of
_______________ Pension Plans exceeding the value of
___________________________, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in excess of benefit
The Company will (i) promptly upon filing the same with the Department
of Labor or Internal Revenue Service, furnish to Fleet a copy of the most
recent actuarial statement required to be submitted under Section 103(d) of
ERISA and Annual Report, Form 5500, with all required attachments, in respect
of each Guaranteed Pension Plan and (ii) promptly upon receipt or dispatch,
furnish to each Purchaser any notice, report or demand sent or received in
respect of a Guaranteed Pension Plan under Sections 302, 4041, 4042, 4043,
4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan,
under Section 4041A, 4202, 4219, 4242 or 4245 of ERISA.
SECTION 6.8. FURTHER ASSURANCES. Each of the Company and the
Subsidiaries will cooperate with the Purchasers and execute such further
instruments and documents as the Purchasers shall reasonably request to carry
out to the satisfaction of the Purchasers the transactions contemplated by
this Agreement or any other Related Agreement.
SECTION 6.9. NOTICES. The Company will promptly notify the Purchasers in
writing of the occurrence of a Noncompliance Event or if any Person shall
give any notice or take any other action in respect of a claimed default with
respect to any material agreement to which the Company or any of the
Subsidiaries is a party. The Company also covenants and agrees to promptly
provide the Purchasers with written notice: (a) upon the Company or any of
the Subsidiaries obtaining knowledge of any violation of any Environmental
Law regarding the property or the operations of the Company or any of the
Subsidiaries; (b) upon the Company or any of its Subsidiaries obtaining
knowledge of any potential or known release, or threat of release, of any
Hazardous Substances at, from, or into the property which it reports in
writing or is reportable by it in writing to any governmental authority; (c)
upon the Company or any of the Subsidiaries receipt of any notice of
violation of any Environmental Laws or of any release or threatened release
of Hazardous Substances, including a notice or claim of liability or
potential responsibility from any third party (including, without limitation,
any federal, state or local governmental officials) and including notice of
any formal inquiry, proceeding, demand, investigation or other action with
regard to (i) the Company's, any of the Subsidiaries' or any other Person's
operation of the property, (ii) contamination on, from or into the property,
or (iii) investigation or remediation of off site locations at which the
Company, any of the Subsidiaries or any of
their predecessors are alleged to have directly or indirectly disposed of
Hazardous Substances; or (d) upon the Company or any of the Subsidiaries
obtaining knowledge that any expense or loss has been incurred by such
governmental] authority in connection with the assessment, containment,
removal or remediation of any Hazardous Substances with respect to which the
Company or any of its Subsidiaries may be liable or for which a Lien may be
imposed on the property.
SECTION 6.10. DISTRIBUTIONS. Neither the Company nor any Related Entity
shall make any Distribution except (a) the Company may redeem from TDS the
outstanding shares of 10% Cumulative, Compounded, Convertible, Redeemable
Class A Preferred Stock of the Company, (b) the Company may pay dividends, in
accordance with the Certificate of Designation, to Dobson CC Limited
Partnership, the majority shareholder of the Company (the "Partnership"), for
the purpose of making distribution ____________________________ to service
the Trust and ____________________ pro rata dividends are simultaneously
declared to the holder of Class B Preferred Stock and paid in accordance with
the Certificate of Designation and the other holders of Common Stock as
provided in the Certificate of Designation and (c) the Company may redeem the
Purchased Securities in accordance with the terms of the Financing Agreements.
SECTION 6.11. DILUTION PROTECTION. Except for the issuance of Purchased
Securities set forth in SECTION 2.1 and except for the issuance of the
Qualified Options, neither the Company nor any Subsidiary will (a) issue,
sell, give away or otherwise transfer, (b) grant any rights (either
preemptive or other) or options to subscribe for or purchase, or (c) enter
into any agreements or issue any warrants providing for the issuance of, any
of its capital stock or other equity interest (or any stock or securities
convertible into or exchangeable for any of their capital stock or other
equity interest). Neither the Company nor any of the Subsidiaries shall
authorize any additional class or series of shares or increase the number of
shares of authorized capital from that set forth in SCHEDULE 3.2 hereto.
SECTION 6.12. MERGER, CONSOLIDATION, SALE OF ASSETS OR OTHER
DISPOSITIONS. Except for the merger of a Subsidiary with and into the Company
or any other Subsidiary, neither the Company nor any Subsidiary will become a
party to any merger or consolidation, or sell, lease, sublease or otherwise
transfer or dispose of any
shares of or other equity interests in a Subsidiary or any substantial
portion of its assets, rights and licenses to any Person, whether directly or
indirectly or in a single transaction or a series of related transactions,
other than (a) sales of inventory, used equipment and other assets not in the
aggregate material to the business in the ordinary course of business and
transfers constituting Permitted Liens or turn over the management of, or
enter into a management contract with respect to, any of its assets or
properties, rights and licenses
SECTION 6.13. TRANSACTIONS WITH AFFILIATES. Neither the Company nor any
Subsidiary will engage in any transaction with any of its Affiliates other
than the Purchasers and their Affiliates except for (a) transactions
permitted under the Related Agreements and (b) arms length transactions not
exceeding $100,000 in the aggregate in any fiscal year.
SECTION 6.14. SALE AND LEASEBACK OF PROPERTY. Neither the Company nor
any Subsidiary will enter into any arrangement, directly or indirectly, with
any Person whereby it shall sell or transfer any property, whether real,
personal or a combination thereof, used or useful in its business, whether
now owned or hereinafter acquired, and thereafter rent or lease such property.
SECTION 6.15. JOINT VENTURES. Neither the Company nor any Subsidiary
will cause or consent to any joint venture engaging in any activity which
would result in the joint venture being in breach of any representation,
warranty, covenant or agreement set forth in this Agreement or any other
Related Agreement as if the joint venture were a Subsidiary.
SECTION 6.16. INVESTMENTS. The Company will not, and will not permit any
Subsidiary to, have outstanding or acquire or commit itself to acquire or
hold any Investment except Investments in: (a) marketable direct obligations
issued or guaranteed by the United States of America which mature within one
year from ______________ are subject to a repurchase agreement, exercisable
within 90 days from the date of acquisition of such agreement, with any
commercial bank or trust company __________ under the laws of the United
States of America or any State thereof or the District of Columbia, (b)
commercial paper maturing within one year from the date of acquisition
thereof and having, at the date of acquisition thereof, the highest rating
obtainable from Moody's Investors Service, Inc.
or Standard & Poor's Corporation, (c) bankers' acceptances eligible for
rediscount under Federal Reserve Board requirements accepted by any
commercial bank or trust company referred to in clause (a) hereof, (d)
certificates of deposit maturing within one year from the date of acquisition
thereof issued by any commercial bank or trust company referred to in clause
(a) hereof and having capital and surplus of at least $25,000,000, (e)
certificates of deposit issued by banks organized under the laws of any other
jurisdiction, each having combined capital and surplus of not less than
$25,000,000, and (f) Investments by the Company and each Subsidiary existing
on the date of this Agreement.
SECTION 6.17. SENIOR MANAGEMENT; COMPENSATION. (a) The aggregate
compensation paid by the Company to any officer set forth in SCHEDULE 6.17
for any fiscal year of the Company shall not be greater than the amount set
forth opposite such Person's name on such Schedule.
SECTION 6.18. COMPLIANCE WITH CAPITAL BUDGET.(a) Except as set forth in
Section 6.18(b) below, the Company and each Subsidiary shall at all times
comply with the Budget approved by the Company and the Purchasers prior to
the beginning of each fiscal year in accordance with SECTION 7.3(a). In the
event any Budget for a particular fiscal year is not approved by the Company
and the Purchasers in accordance with this SECTION 6.18, then the applicable
expenditures for such fiscal year shall not exceed the greater of (x) the
amount set forth in the Projections for such fiscal year or (y) the amount
set forth in the most recent Budget which was approved by the Company and the
Purchasers pursuant to Section 7.3(a) for such fiscal year.
(b) Neither the Company nor any Subsidiary will incur expenditures for
any capital expenditure item in any fiscal year if as a result thereof the
amount which would be expended for such item would exceed 115% of the amount
budgeted for such item in the Budget for such fiscal year; provided that the
Company or any Subsidiary may incur expenditures for a capital expenditure
item in excess of 115% of the amount budgeted for such item in the Budget
(the "Excess Amount") for such fiscal year so long as the aggregate Excess
Amount for all such items which exceed 115% of the amount budgeted therefor
does not exceed $300,000 in any fiscal year.
SECTION 6.19. RESPONSE ACTIONS. The Company covenants and agrees that if
any release or disposal of Hazardous Substances shall occur or shall have
occurred on the premises occupied by the Company or any Subsidiary, the
Company will cause the prompt containment and removal of such Hazardous
Substances and remediation of the property as necessary to comply in all
material respects with all Environmental Laws or to preserve in all material
respects the value of the property.
SECTION 6.20. MERGER, CONSOLIDATION OR OTHER ACQUISITIONS. Neither the
Company nor any Subsidiary shall directly or indirectly, by operation of law
___________________ consolidate with, acquire all or _____________________
(other than purchases of inventory made in the ordinary course of the
Company's business) _______________-- of, otherwise combine with, any Person
except for a merger, consolidation or acquisition having a purchase price
less than $500,000 in any single transaction or for mergers, consolidations
and acquisitions having an aggregate purchase price less than $1.0 million in
any twelve-month period.
SECTION 6.21. CHARTER AMENDMENTS. The Charter and by-laws of the Company
and each Related Entity shall not be amended or modified if such amendment or
modification has, or would have, directly or indirectly, any material adverse
effect on any holder of any then outstanding Purchased Securities or on the
rights or remedies of such holder hereunder or under any of the Related
SECTION 6.22. CONTROL OF SYSTEMS. Notwithstanding any provision of this
Agreement that may be construed to the contrary, the Cellular Subsidiaries
and Acquiring Subsidiaries shall maintain actual (de facto) and legal (de
jure) control over their respective Systems and FCC licenses. Specifically,
and without limitation, the responsibility for the operation of each of the
Systems shall reside with the Cellular Subsidiary or Acquiring Subsidiary
holding the FCC license therefor, including (but not limited to)
responsibility for the following matters: (a) access to and the use of
facilities and equipment; (b) control of daily operation; (c) creation and
implementation of policy decisions; (d) employment, supervision and dismissal
of employees; (e) payment of financing obligations and expenses incurred in
the operation and construction of the Systems; (f) receipt and distribution
of monies and profits derived from the operation of the Systems; and (g)
approval of all contracts and applications prepared and filed before
SECTION 6.23. TRUST LOAN REPAYMENT. So long as the Trusts are the
borrowers under the Trust Loan, the Company shall not make any distributions
to the Trusts to service the Trust Loan except by paying dividends to the
Partnership which shall then distribute such monies to the Trust to make
principal, interest and other payments due in respect of the Trust Loan.
SECTION 6.24. PAYMENT OF AFFILIATE NOTES. None of the promissory notes
listed on SCHEDULE 3.8 will be forgiven, and each such promissory note issued
by an Affiliate listed on SCHEDULE 3.8 will not be amended, extended or
modified and the Company shall cause the applicable payee of such promissory
note to collect all outstanding principal and accrued but unpaid interest on
such promissory note in accordance with the terms set forth in such
The Company hereby agrees that so long as any of the Purchased
Securities or any of the Common Shares are held by any Purchaser, it will
comply with, and it will cause each Subsidiary to comply with, the following
SECTION 7.1. ANNUAL STATEMENTS. As soon as available and in any event
within 90 days after the close of each fiscal year of the Company commencing
with the ____________________ ending on December 31, 1995, the Company will
_____ Purchaser audited consolidated and unaudited consolidating balance
sheets and statements of income and retained earnings and of cash flows of
the Company audited by Arthur Andersen, L.L.P. or any other public accounting
firm selected by the Company and reasonably acceptable to the Purchasers,
showing the financial condition of the Company as of the close of such fiscal
year and the results of the Company's operations during such fiscal year, all
on a consolidated basis. Each of the financial statements delivered hereunder
shall be certified without qualification by such accounting firm to have been
prepared in accordance with GAAP consistently applied and if such firm in the
course of its audit shall have obtained knowledge
of any such Noncompliance Event or so advises the Company, the Company shall
cause such firm to notify each Purchaser in writing of the nature thereof.
SECTION 7.2. QUARTERLY STATEMENTS. Within forty-five (45) days after the
end of each quarter commencing with the quarter ending December 31, 1995, the
Company will deliver to each Purchaser consolidated and consolidating
unaudited balance sheets and statements of income and retained earnings and
of cash flows of the Company as of the end of each such quarter and for the
period of the then current fiscal year to the end of such month, and
presenting on a comparative basis the corresponding figures for such period
in the preceding fiscal year and the then current Budget, in each case by
region, certified by the Chief Financial Officer of the Company to be true
and correct and to have been prepared in accordance with GAAP subject to
normal year-end adjustments described in reasonable detail.
SECTION 7.3. BUDGETS AND OTHER REPORTS. (a) The Company will deliver to
the Purchasers, within thirty (30) days prior to the commencement of each
fiscal year, project spending and capital budgets for the five immediately
succeeding fiscal years, projected monthly statements of income and cash flow
for such fiscal years (the "Budget"), projected quarterly balance sheets for
such fiscal years and as soon as practical after preparation thereof,
complete and correct copies of all quarterly (if any) or annual budgetary
analyses or forecasts of the Company and the Subsidiaries in the form
customarily prepared by management for its own internal use or the use of the
Company. The Company the Purchasers shall once each calendar year, commencing
with the Company's 1996 fiscal year, conduct an annual off-site meeting to
review the Company's projections and business plans with respect to such
fiscal year and the immediately succeeding four fiscal years.
(b) The Company shall also furnish to each Purchaser (i) within five
(5) days of the Company's receipt thereof, copies of all management letters
of the Company's accountants; (ii) within five (5) days of the Company's
receipt thereof, notice with respect to any material pending or threatened
litigation to which the Company or any Subsidiary is or may become a party;
(iii) within five (5) days of the Company's receipt thereof, notice of any
default or event of default with respect to any material agreement to which
the Company or any Subsidiary is a party; (iv) within five
(S) days of the filing thereof, copies of all material flings made by or on
behalf of the Company or any Subsidiary with any governmental regulatory
agency; and (v) such other information as any Purchaser may reasonably
request from time to time.
(c) Within fifteen (15) days after the end of each calendar month
commencing with the calendar month ending January 31, 1996, the
_______________________________ monthly and year-to-date summaries, on a
consolidated basis broken down for each market in which the Company or any
Subsidiary operates any System, of the following: (a) number of Pops, (b)
number of subscribers, (c) gross activations, (d) net activations, (e)
deactivations (and setting forth the reason therefor), (f) acquisition cost
per gross activation, (g) average monthly revenue per subscriber, (h) total
number of roaming minutes, (i) total roaming revenue and (j) any other
information which the Purchasers may request from time to time.
SECTION 8.1. NONCOMPLIANCE EVENTS. The Purchasers shall be entitled to
exercise the remedies provided in SECTION 8.2 in accordance with the terms
thereof if any one or more of the following events (each a "Noncompliance
Event") shall occur:
(a) the Company or any Subsidiary shall fail to perform or observe any
of the covenants, agreements or provisions to be performed or observed by it
under this Agreement or any of the other Related Agreements, except that for
purposes of Section 9 of the Shareholders' Agreement (i) the failure of the
Company or any Subsidiary to perform or observe the provisions of Sections
6.3, 6.4, 6.5, 6.7, 6.8, 6.9, 6.16, 6.18, 6.19 and/or 7.3 of this Agreement
shall not be a Noncompliance Event and (ii) the failure of the Company to
comply with the provisions of Sections 7.1 and/or 7.2 of this Agreement shall
not be a Noncompliance Event until such failure to so comply has continued
for 60 days; or
(b) any representation or warranty made by the Company or any
Subsidiary to any Purchaser in or in connection with this Agreement or any
other Related Agreement shall prove to have been materially false on the date
as of which it was made; or
(c) a default with respect to Indebtedness for borrowed money of the
Company or any Subsidiary shall occur, and such default shall continue,
without having been duly cured, waived or consented to, beyond the period of
grace, if any, therein specified and so as to permit the acceleration
thereof, if any acceleration is provided for therein, and such default shall
continue uncured and unwaived for 120 days after the expiration of such grace
period unless, during such 120-day period, the applicable Indebtedness for
borrowed money is accelerated, PROVIDED, HOWEVER, that so long as the
applicable Indebtedness for borrowed money is not accelerated, for purposes
of Section 9 of the Shareholders' Agreement, a violation of this subparagraph
(c) of Section 8.1 shall not be a Noncompliance Event; or
(d) a final judgment which in the aggregate with other outstanding
final judgments against the Company or any Subsidiary exceeds $5.0 million
(in excess of available insurance recoveries) in any 12-month period shall be
rendered against such Person and, within sixty (60) days after entry thereof,
such judgment shall not have been satisfied and discharged o-r stayed pending
appeal or bonded, or within sixty (60) days after expiration of such stay
such judgment shall not have been discharged; PROVIDED, HOWEVER, that for
purposes of Section 9 of the Shareholders' Agreement, a violation of this
subparagraph (d) (of Section ____________ of the Noncompliance Event; or
(e) the Company or any Subsidiary shall:
(i) commence a voluntary case under Title 11 of the United
State Bankruptcy Code as from time to time in effect, or authorize, by
appropriate proceedings of its board of directors or other governing body,
the commencement of such a voluntary case;
(ii) have filed against it a petition commencing an involuntary case
under said Title 11 and such petition shall not have been dismissed or
stayed within sixty (60) days;
(iii) seek relief as a debtor under any applicable law, other than
said Title 11, of any jurisdiction relating to the liquidation or
reorganization of debtors or to the modification or alteration of the
rights of creditors, or consent to or acquiesce in such relief; or
(iv) have entered against it an order by a court of competent
jurisdiction (x) finding it to be bankrupt or insolvent, (y) ordering or
approving its liquidation, reorganization or any modification or alteration
of the rights of its creditors, or (z) assuming custody of, or appointing a
receiver or other custodian for, all or a substantial part of its property;
which order shall not be vacated, denied, set aside or stayed within sixty
(60) days from the date of entry thereof; or
(v) make an assignment of all or a substantial part of its
assets for the benefit of, or enter into a composition with, its creditors,
or appoint or consent to the appointment of a receiver or other custodian
for all or a substantial part of its assets,
(f) Dobson shall die, become disabled or shall other,vise cease for any
reason to serve as the President of the Company unless replaced by a Person of
comparable experience and expertise acceptable to the Purchasers within six
months of the termination of Dobson's service; or
(g) any of the proceeds from the sale of the Preferred Shares are used for
a purpose not set forth in SECTION 2.4 above; or
(h) with respect to any Guaranteed Pension Plan, an ERISA Reportable Event
shall have occurred and the Purchasers shall have determined in their reasonable
discretion that such event reasonably could be expected to result in liability
of the Company or any of its Subsidiaries to the PBGC or the Plan and such event
in the circumstances occurring reasonably could constitute grounds for the
termination of such Plan by the PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer such Plan; or a trustee
shall have been appointed by the United States District Court to administer such
Plan; or the PBGC shall have instituted proceedings to terminate such Plan; or
(i) Dobson does not at all times have voting control over the securities
of the Company owned by the Partnership (the "Partnership Block") or Dobson does
not own at all times, beneficially, at least ninety percent (90%) of the
economic interests of the Partnership Block on a fully diluted basis which
Dobson owned on the Closing Date.
(j) So long as the Trust Borrowers are the Borrowers under the Trust Loan,
if any document, instrument or agreement executed in connection with the Trust
Loan is amended or modified without the prior written approval of the
SECTION 8.2. REMEDIES. Upon the occurrence of any Noncompliance Event then
in each and every such case, the Purchasers may proceed to protect and enforce
their rights by suit in equity, action at law or other appropriate proceeding
either for specific performance of any covenant, provision or condition
contained or incorporated by reference in this Agreement or any other Related
Agreement or in aid of the exercise of any power or right granted in this
Agreement or any other Related Agreement.
SECTION 8.3. WAIVERS. Each of the Company and its Subsidiaries hereby
waives, to the extent not prohibited by applicable law, (a) all presentments,
demands for performance and notices on nonperformance (except to the extent
specifically required by the provisions hereof), and (b) any requirement of
diligence or promptness on the part of any holder of Preferred Shares or Common
Shares in the enforcement of its rights under the provisions of this Agreement
or any Related Agreement.
REGISTRATION AND TRANSFER OF PURCHASED SECURITIES
SECTION 9.1. REGISTRATION, TRANSFER AND EXCHANGE OF PURCHASED SECURITIES.
(a) The Company shall keep at its principal office a register in which
shall be entered the names and addresses of the holders of the Preferred Shares
and the Common Shares and the particulars (including without limitation the
class thereof) of the Preferred Shares and the Common Shares held by them and of
all transfers of shares of its Preferred Shares and Common Shares. References to
the "holder" or "holder of record" of any shares of Preferred Shares and Common
Shares shaD mean the holder thereof unless the holder shall have presented the
certificates evidencing same to the Company for transfer and the transferee
shall have been entered in said register as a subsequent holder, in which case
the terms shall mean such subsequent holder. The ownership of any of the
Shares and the Common Shares shall be proven by such register and the Company
may conclusively rely upon such register.
(b) Upon surrender at such office of any certificate representing shares
of Preferred Shares or Common Shares for registration of exchange or transfer,
the Company shall issue, at its expense, one or more new certificates, in such
denomination or denominations as may be requested, for Preferred Shares or
Common Shares (as applicable) and registered as such holder may request. Any
certificate representing shares of Preferred Shares or Common Shares surrendered
for registration of transfer shall be duly endorsed, or accompanied by a written
instrument of transfer duly executed by the holder of such certificate or his
attorney duly authorized in writing. Prior to any transfer of any Preferred
Shares or Common Shares which are not registered under an effective registration
statement under the Securities Act, no holder thereof shall transfer any such
Preferred Shares or Common Shares unless (i) such transfer is effected pursuant
to Rule 144 or any comparable rule under the Securities Act or (ii) prior to
such transfer, the Company shall receive a written opinion reasonably
satisfactory in form and substance to the Company of counsel designated by such
holder and reasonably satisfactory to the Company that the proposed transfer may
be effected without registration under the Securities Act. The Company will pay
shipping and insurance charges, from and to each holder's principal office, upon
any transfer, exchange or conversion provided for in this SECTION 9.1.
(c) Each certificate evidencing Preferred Shares and Common Shares,
whether originally or in substitution for, or upon transfer or exchange of any
Preferred Shares or Common Shares shall be registered on the date of execution
thereof by the Company. The registered holder of record shall be deemed to be
the owner of the Preferred Shares or Common Shares (as applicable) for all
purposes of this Agreement. All notices given hereunder to the holder of record
shall be deemed validly given if given in the manner specified in Article XII
hereof. So long as appropriate, the following legend shall be imprinted on each
certificate evidencing the Preferred Shares and Common Shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
AND MAY NOT BE
SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER."
SECTION 9.2. REPLACEMENT PURCHASED SECURITIES. Upon receipt of evidence and
indemnity reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of any Preferred Share or Common Share and, in the case of any
such mutilation, upon the surrender of such Preferred Share or Common Share for
cancellation to the Company at its principal office, the Company will execute
and deliver, in lieu thereof, a new Preferred Share or Common Share of like
tenor. Any Preferred Share or Common Share in lieu of which any such new
Preferred Share or Common Share has been so executed and delivered by the
Company shall not be deemed to be outstanding for any purpose of this Agreement.
EXPENSES; INDEMNITY; MISCELLANEOUS
SECTION 10.1. EXPENSES. The Company hereby agrees to pay on demand all
reasonable fees, costs and expenses incurred by the Purchasers, in connection
with the transactions contemplated by this Agreement and the other Related
Agreements an in connection with any amendments or waivers (whether or not the
same become effective) thereof or thereof and all reasonable expenses incurred
by the Purchasers in connection with the enforcement of any rights hereunder or
under any other Related Agreement including, without limitation, (a) the cost
and expenses of due diligence and of preparing and dupLicating this Agreement
and each other Related Agreement; (b) the fees, expenses and disbursements of
Purchasers' counsel in connection with the preparation, administration or
interpretation of this Agreement and the other Related Agreements and other
instruments mentioned herein, the Closing, any amendments, modifications,
approvals, consents or waivers hereto, thereto, hereunder or thereunder; (c) the
fees, expenses and disbursements of the Purchasers' accountants, in connection
with the Purchasers due diligence investigation of the Company and the
Subsidiaries; and (d) all taxes (other than taxes determined with respect to
income and taxes relating to any transfer of any shares of Preferred Stock other
than to the Company), including any recording fees and filing fees and
documentary stamp and similar taxes at any time payable in respect of this
Agreement or any other
Related Agreement. Further, the Company agrees to pay all reasonable
out-of-pocket expenses (including, without limitation, reasonable attorneys'
fees and costs, all costs associated with any rights of board attendance,
observation or inspection and travel and lodging expenses related thereto and
accounting fees) incurred by any Purchaser in connection with the enforcement
of or preservation of rights under this Agreement or any other Related
Agreements or the administration thereof whether before or after the
occurrence of a Noncompliance Event.
SECTION 10.2. INDEMNIFICATION. The Company hereby further agrees to
indemnify, exonerate and hold each Purchaser and its (if applicable) general and
limited partners and their respective Affiliates, shareholders, officers,
directors, employees and agents free and harmless from and against any and all
actions, causes of action, suits, losses, liabilities, damages and expenses,
including, without limitation, reasonable attorneys' fees and disbursements,
incurred in any capacity by any of the indemnities as a result of or relating to
(a) any transaction financed or to be financed in whole or in part directly or
indirectly with proceeds from the sale of any of the Preferred Shares, (b) the
execution, delivery, performance or enforcement of this Agreement, any Related
Agreement or any agreement, document or instrument contemplated hereby or
thereby (including, without limitation, any failure by any Person other than the
Purchasers to comply with any of its covenants hereunder or thereunder), (c) any
violation of any Environmental Laws with respect to conditions at the property
owned or used by the Company or a Subsidiary or the operations conducted
thereon, or (d) the investigation or remediation of offsite locations at which
the Company, the Company any of the Subsidiaries or their respective
predecessors are alleged to have directly or indirectly disposed of Hazardous
SECTION 10.3. BROKERS' FEES. The Company hereby indemnifies each Purchaser
against and agrees that it will hold it harmless from any claim, demand or
liability for any broker's, finder's or placement fees or lender's incentive
fees alleged to have been incurred by it or any Subsidiary in connection with
the transactions contemplated by this Agreement or any Related Agreement.
SECTION 10.4. SURVIVAL OF OBLIGATIONS. The obligations of the Company under
this Article X shall survive the termination of this Agreement.
SECTION 10.5. COURSE OF DEALING. No course of dealing between the Company
on the one hand, and the Purchasers, on the other hand, shall operate as a
waiver of any Purchaser's rights under this Agreement or any other Related
Agreement. No delay or omission in exercising any right under this Agreement or
any other Related Agreement shall operate as a waiver of such right or any other
right. A waiver on any one occasion shall not be construed as a bar to or waiver
of any right or remedy on any other occasion.
SECTION 10.6. BINDING EFFECT. The provisions of this Agreement and the
other Related Agreements that are for the benefit of the Purchasers as the
holders of any Preferred Shares are also for the benefit of, and enforceable by
and binding upon, all subsequent holders of Preferred Shares who may acquire
such shares, and the provisions of this Agreement and the other Related
Agreements that subject the Purchasers, as holders of any Preferred Shares, to
obligations also subject all subsequent holders of any of the Preferred Shares
Any notice or other communication in connection with this Agreement or any
Related Agreement shall be deemed to be delivered if in writing (or in the form
of a telex or telecopy) addressed as provided below (a) when actually delivered,
telexed or telecopied to said address, or (b) in the case of a letter, three
Business Days shall have elapsed after the same shall have been deposited in the
United States mails, postage prepaid and registered or certified:
(i) If to the Company, then to it at its address set forth on the
signature pages hereto, or at such other address as such Person shall have
specified by notice actually received by each Purchaser.
(ii) If to a Purchaser, then to it at its address set forth on SCHEDULE 1,
or at such other address as such Purchaser shall have specified by notice
actually received by the addressee.
SURVIVAL OF COVENANTS, AGREEMENTS,
REPRESENTATIONS AND WARRANTIES
All covenants, agreements, representations and warranties made herein or
in any other Related Agreement or in any other document referred to herein or
therein shall be deemed to have been relied on by each Purchaser,
notwithstanding any investigation made by any Purchaser or on its behalf, and
shall survive the execution and delivery of this Agreement.
AMENDMENTS AND WAIVERS
Except as otherwise expressly provided herein, any term of this Agreement
may be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and each of the
CONSENT TO JURISDICTION
THE COMPANY HEREBY AGREES TO SUBMIT TO THE NON EXCLUSIVE JURISDICTION OF
THE COURTS IN AND OF THE STATE OF DELAWARE AND TO JURISDICTION OF THE UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE AND TO THE COURTS TO WHICH AN
APPEAL OF THE DECISIONS OF SUCH COURTS MAY BE TAKEN, AND CONSENTS THAT SERVICE
OF PROCESS WITH RESPECT TO ALL COURTS IN AND OF THE STATE OF DELAWARE AND THE
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE MAY BE MADE BY
REGISTERED MAIL TO IT AT THE COMPANY'S ADDRESS SET FORTH ON THE SIGNATURES PAGES
WAIVER OF JURY TRIAL
EACH OF THE COMPANY AND THE PURCHASERS HEREBY EXPRESSLY WAIVES ANY RIGHT
IT MAY HAVE TO A JURY TRIAL IN ANY SUIT, ACTION OR
PROCEEDING EXISTING UNDER OR RELATING TO THIS AGREEMENT OR ANY OF THE RELATED
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH I E
LAWS OF DELAWARE WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW
PROVISION OR RULE THAT WOULD CAUSE TEE APPLICATION OF THE DOMESTIC SUBSTANTIVE
LAWS OF ANY OTHER STATE, AND SHALL BIND AND INURE TO THE BENEFIT OF THE PARTIES
HERETO AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.
RIGHT TO PUBLICIZE
The Company hereby acknowledges that the Purchasers will have the right,
subject to the reasonable prior written approval of the Company, to publicize
their investment in the Company as contemplated hereby by means of a tombstone
advertisement or other customary advertisement in newspapers and other
Each of the Company and the Purchasers, upon the request of the other party
hereto, whether before or after the Closing, shall do, execute, acknowledge and
deliver or cause to be done, executed, acknowledged or delivered all such
further acts, deeds, documents, assignments, transfers, conveyances, powers of
attorney and assurances as may be reasonably necessary or desirable to effect
complete consummation of the transactions contemplated by this Agreement.
TIME OF THE ESSENCE
Time shall be of the essence of this Agreement.
ENTIRE AGREEMENT; COUNTERPARTS; SECTION HEADINGS
This Agreement, the Preferred Shares and the Related Agreements set forth
the entire understanding of the parties hereto with respect to the transactions
contemplated hereby and supersede any prior written or oral understandings with
respect thereto. This Agreement may be executed simultaneously in one or more
counterparts thereof, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The headings in this
Agreement are for convenience of reference only and shall not alter or otherwise
affect the meaning hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written:
DOBSON COMMUNICATIONS CORPORATION
By: /s/ Everett R. Dobson
Everett R. Dobson
Address for Notices:
13439 N. Broadway Extension
Oklahoma City, Oklahoma 73114
Attn: Everett R. Dobson
Telecopy No.: (405) 391-8515
Telephone No.: (405) 391-8500
FLEET EQUITY PARTNERS VI, L.P.
By: Fleet Growth Resources II, Inc.,
a General Partner
By: /s/ Thadeus J. Mocarski
Thadeus J. Mocarski
Address for Notices:
111 Westminster Street
Providence, Rhode Island 02903
Att: Thadeus J. Mocarski
Telecopy No.: (401) 278-6387
Telephone No.: (401) 278-5678
FLEET VENTURE RESOURCES, INC.
By: /s/ Thadeus J. Mocarski
Thadeus J. Mocarski
Address for Notices:
111 Westminster Street
Providence, Rhode Island 02903
Attn: Thadeus J. Mocarski
Telecopy No.: (401) 278-6387
Telephone No.: (401) 278-5678
KENNEDY PLAZA PARTNERS
Address for Notices:
c/o Fleet Equity Partners
111 Westrninster Street
Providence, Rhode Island 02903
Att: Thadeus J. Mocarski
Telecopy No.: (401) 278-6387
Telephone No.: (401) 278-5678