EXHIBIT 2.3
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PARTNERSHIP INTEREST OPTION AGREEMENT
This PARTNERSHIP INTEREST OPTION AGREEMENT (this "Agreement") is made
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as of May 3, 1996, by and among AVERY COMMUNICATIONS, a Delaware corporation
("ACI"), AVERY ACQUISITION SUB, INC., a Texas corporation ("Merger Sub"), and
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HAROLD D. BOX and DAVID W. MECHLER (collectively, "Partners").
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RECITALS
A. Contemporaneously herewith, ACI, Merger Sub and Home Owners Long
Distance Incorporated, a Texas corporation ("HOLD"), the Partners and others are
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entering into an Agreement and Plan of Merger (the "HOLD Merger Agreement")
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pursuant to which, subject to the terms and conditions set forth therein, Merger
Sub will merge with and into HOLD, and HOLD will become a wholly owned
subsidiary of ACI.
B. Contemporaneously herewith, ACI, Merger Sub, Hold Billing Services,
Ltd., a Texas limited partnership ("Billing" or the "Partnership"), Hold Billing
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& Collection, L.C., a Texas limited liability company and the general partner of
Billing, the Partners and the other limited partners of the Partnership are
entering into a Partnership Interest Purchase Agreement (the "Partnership
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Interest Purchase Agreement") pursuant to which, subject to the terms and
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conditions set forth therein, Merger Sub will buy 54% of the Partnership
Interest of the Partnership. As used herein, the term "Partnership Interest"
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means all of a Partner's interest in the Partnership, including, without
limitation, (i) the right to receive distributions of the assets of the
Partnership, (ii) the right to receive allocations of income, gain, loss,
deduction, or credit of the Partnership, (iii) the right, if any, to participate
in the affairs of the Partnership pursuant to the Limited Partnership Agreement
of Hold Billing Services, Ltd. effective May 13, 1994 (the "Partnership
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Agreement") or the Texas Revised Limited Partnership Act ("TRLPA"), (v) the
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right to any and all benefits to which a Partner is entitled under the
Partnership Agreement or TRLPA, and (v) the obligations to comply with the
Partnership Agreement; and the term "Partner's Rights" means all of a Partner's
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right, title, and interest in, to, and under the Partnership Interest.
C. The Partners own an aggregate of 46% of the Partnership Interests of
the Partnership. Subject only to the limitations and exclusions contained in
this Agreement, and on the terms and conditions hereinafter set forth, each of
the Partners desires to grant to Merger Sub an option to purchase all of
Partner's Partnership Interest and Partner's Rights in the Partnership Interest
upon the terms, and subject to the conditions, herein set forth.
NOW, THEREFORE, in consideration of the recitals and of the respective
covenants, representations, warranties and agreements herein contained, and
intending to be legally bound hereby, the parties hereto hereby agree as
follows:
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ARTICLE 1
OPTIONS
SECTION 1.1 GRANT OF OPTION TO PURCHASE PARTNERSHIP INTEREST. Subject
to the terms and conditions of this Agreement, Partners hereby grant to ACI an
option (the "Option") to purchase from Partners all of Partners' Partnership
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Interest and the Partners' Rights in the Partnership Interest, free and clear of
any and all (i) liens, (ii) security interests, (iii) pledges, (iv) mortgages,
(v) deeds of trust, (vi) charges, (vi) claims, (vii) conditional sales
agreements, (viii) rights of assignment, (ix) rights to purchase, (x) rights of
first offer or refusal, (xi) options, (xii) warrants, (xiii) other rights of
third parties of any type, description or nature whatsoever, or (xiv) other
encumbrances of any type, description or nature whatsoever (collectively,
"Liens").
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SECTION 1.2 CONSIDERATION FOR OPTION. In consideration for the grant of
the Option, ACI shall pay to the Partners the sum of $10.00 (the "Option
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Price,").
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SECTION 1.3. EXERCISE PRICE. If ACI exercises the Option during the
Option Term (as hereinafter defined), the exercise price (the "Exercise Price")
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shall be the Partnership Interest Value. As used herein, "Partnership Interest
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Value" shall mean the value of the Partners Partnership Interest, determined by
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a nationally recognized investment banking firm (the "Initial Banker"), to be
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mutually agreed upon by the Partners and ACI (or if the Partners and ACI are
unable to agree, the New York office of Merrill Lynch & Co.), in light of such
investment banking firm's evaluation of Billing's current earnings as of the
date the Option Exercise Notice (as hereinafter defined) and such other similar
matters that such investment banking firm shall deem relevant less the aggregate
amount of distributions received by the either Partner that was not made pro
rata to all the limited and general partners of the Partnership; provided,
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however, such investment banker shall not consider the following factors in
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determining the Partnership Interest Value:
(i) minority interest discounts or controlling interest premiums;
(ii) fees or overhead paid to or allocated from ACI; or
(iii) amortization of intangibles resulting from acquisitions.
Upon ACI's receipt of the Initial Banker's determination of the
Partnership Interest Value, it shall promptly notify the Partners of such
determination and the assumptions and methodology utilized in arriving at such
determination and provide the written opinion of the Initial Banker as to its
determination. If within 30 Business Days of receipt of such determination, the
Partners shall not object thereto, ACI will consummate the exercise of the
Option. If within such 30-day period the Partners shall object in writing to
such determination, the Partners may appoint, at its sole cost and expense, a
nationally recognized investment banking firm (the "Partners' Banker") to
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undertake separately the evaluation prescribed above. Not later than 60 days
following its written notice to ACI of its objection to the Initial Banker's
determination, the Partners shall provide ACI with the Partners' Banker's
determination, including the assumptions and methodology utilized in arriving at
such determination and provide the written opinion of the Partners' Banker as to
its determination. If the Partners do not provide ACI with these materials
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within the 60-day period prescribed above, ACI shall be entitled to consummate
the exercise of its option pursuant hereto. The fees and expenses of the Initial
Banker shall be borne by ACI. The time limits herein may be extended by the
parties to provide the investment bankers such additional time as they may
request.
If within 30 days of the delivery of the determination of the Partners'
Banker, the Partners' Banker and the Initial Banker are unable to resolve their
differing determinations and arrive at an agreed upon value, then a third
nationally recognized investment banking firm, selected by the agreement of the
Initial Banker and the Partners' Banker, shall undertake to make the
determinations prescribed above. Such investment banker's determination as to
the Partnership Interest Value shall be delivered to ACI and the Partners along
with the assumptions and methodology utilized in arriving at such determination
as well as the written opinion of such investment banker as to its
determination. At such time, the Partnership Interest Value shall be deemed to
be the simple average of the two closest determinations by the three investment
bankers, which determination shall be final and binding upon ACI and the
Partners. The fees and expenses of such third investment banker shall be borne
equally by ACI, on the one hand, and the Partners, on the other hand, and shall
be paid in advance of the performance of such service.
SECTION 1.4 PAYMENTS. The Exercise Price may be paid in (i) cash, (ii)
shares of ACI common stock, par value $.01 per share ("ACI Common Stock") or
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(iii) any combination of cash and shares of ACI Common Stock as ACI, in its sole
discretion, determines; provided however, ACI shall pay sufficient consideration
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in cash to permit the Partners to pay applicable federal income tax (if any)
that is payable as a result of the exercise of the Option. If the Exercise Price
is paid, in whole or in part, with shares of ACI Common Stock, the value of ACI
Common Stock shall be its Current Market Value. As used herein, the term
"Current Market Value" means, if on such date ACI Common Stock is listed or
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admitted to trading on any national securities exchange or quoted on the Nasdaq
Stock Market ("NASDAQ") or otherwise traded in the over-the-counter market in
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the United States, the mean average closing price for the 50 consecutive days
before the fifth business day preceding the Closing Date; or if on such date ACI
Common Stock is not listed or admitted to trading on any national securities
exchange or quoted on the NASDAQ or otherwise traded in the over-the-counter
market in the United States, the amount that a willing buyer would pay a willing
seller in an arm's length transaction on such date (neither being under any
compulsion to buy or sell) for such security as determined on the same basis as
the Exercise Prices is determined under Section 1.3. The Partners shall have
registration rights with respect to the ACI Common Stock by becoming parties to
that Registration Rights Agreement attached as Exhibit B to the HOLD Merger
Agreement; provided however, the piggy back registration rights of the Partners
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shall be effective at the date of the Exercise Option Notice and shall expire on
the earlier of (i) three years from the Option Closing Date (as hereinafter
defined) and (ii) the date on which any Holder (as defined in the Registration
Rights Agreement) may sell shares of Registrable Stock (as defined in the
Registration Rights Agreement) under section k of Rule 144, promulgated under
the Securities Act of 1933, (or any successor provision).
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SECTION 1.5 EXERCISE OF OPTION;TERM. The Option shall become fully
exercisable on the second anniversary of the closing of the merger of ACI with
and into HOLD and shall remain fully exercisable for a period of two years
thereafter (the "Option Term"). ACI may exercise the Option in whole, but not in
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part, at any time before the expiration of the Option Term by giving written
notice of exercise (the "Option Exercise Notice") to the Partners.
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SECTION 1.6 OFFER TO PURCHASE OF MERGER SUB'S PARTNERSHIP INTEREST. If
ACI does not exercise the Option during the Option Term, the Partners may offer
(the "Offer") to purchase Merger Sub's Partnership Interest and its rights in
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its Partnership Interest by giving written notice of the Offer to Merger Sub
within 120 days after the expiration of the Option Term. Such notice shall
contain the purchase price (the "Offer Price") and the other terms and
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conditions of the Offer, together with such information or documentation as is
reasonably satisfactory to ACI to demonstrate the financial capacity of the
Partners to consummate the purchase of the Partnership Interest. Merger Sub may,
in its sole discretion, accept or reject the Offer.
SECTION 1.7 SECOND OPTION. If Merger Sub rejects the Offer, ACI shall
purchase all of the Partners' Partnership Interest and Partners Rights in the
Partnership Interest on the same terms and conditions as contained in the Offer,
except the Offer Price for the Partners' Partnership Interest and Partners
Rights in the Partnership Interest of the Partners shall be reduced pro rata to
reflect the aggregate Partnership Interest then owned by the Partners. The Offer
Price shall be payable upon the same terms and conditions as set forth in
Section 1.4.
ARTICLE 2
CLOSING
SECTION 2.1 CLOSING UPON EXERCISE OF OPTION. The exercise of the Option
(the "Closing") shall take place (i) at the offices of Winstead Sechrest &
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Minick P.C., 5400 Renaissance Tower, Dallas, Texas, at 10:00 a.m., local time,
on the third business day immediately following the day on which the Exercise
Price is determined, or (ii) at such other place, time or date and by such means
as ACI and Partners may agree. The date on which the Option Closing takes place
is referred to herein as the "Closing Date."
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SECTION 2.2 FURTHER ASSURANCES. At the Closing, the Partners shall
execute and deliver to ACI all such instruments and documents, and take or cause
to be taken all such action, as ACI may reasonably request in order to effect
the acquisition by ACI of the Partnership Interest upon exercise of the Option
or the Second Option, as the case may be, and as contemplated by this Agreement,
including instruments or documents deemed necessary or desirable by ACI to
effect and evidence the conveyance of the Partners' Partnership Interests and
Partners' Rights in the Partnership Interests upon exercise of the Option or the
Second Option, as the case may be, by ACI in accordance with the terms of this
Agreement. In the event the Partners effect the acquisition of Merger Sub's
Partnership Interest as contemplated by this Agreement, Merger Sub shall execute
and deliver to the Partners all such instruments and documents, and take or
cause
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to be taken all such action, as the Partners may reasonably request in order to
effect the acquisition by the Partners of Merger Sub's Partnership Interest.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 REPRESENTATIONS AND WARRANTIES OF LIMITED PARTNERS. Each
Partner jointly and severally, represent and warrant to ACI and Merger Sub that:
3.1.1 AUTHORITY. Each Partner has all requisite power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of each
Partner. This Agreement has been duly executed and delivered by each
Partner and constitutes a valid and binding obligation of each Partner
enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general equity principles. The execution and delivery of
this Agreement does not, and the consummation of the transactions
contemplated hereby will not, result in any Violation of any loan or
credit agreement, note, mortgage, indenture, lease, employee benefit
plan or other agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to either Partner or either Partner's
properties or assets, which Violation would prohibit, impair or
restrict the ability of either Partner to execute and deliver this
Agreement, perform in accordance with the terms hereof, or convey the
Partnership Interest to Merger Sub upon exercise of the Option or the
Second Option as contemplated hereby, or would materially and adversely
affect the rights or benefits, or both, hereunder of ACI or Merger Sub.
No consent, approval, order or authorization of, or registration,
declaration or filing with, any governmental entity is required by or
with respect to either Partner in connection with the execution and
delivery of this Agreement by either Partner or the consummation by
either Partner of the transactions contemplated hereby.
3.1.2 TITLE TO PARTNERSHIP INTEREST. Each Partner represents
and warrants, severally and not jointly, and solely on behalf of such
Person individually, to Merger Sub and ACI that: (i) Partner owns the
Partnership Interest set forth on Schedule 3.1.2 hereto beneficially
and of record, free and clear of any and all Liens, and has full power
and authority to convey the Partnership Interest, free and clear of any
and all Liens, and, upon delivery of the Assignment by Partner
conveying its Partnership Interest and payment for such Partnership
Interest as herein provided, Merger Sub (or its designee) will acquire
good and marketable title thereto, free and clear of any and all Liens;
and (ii) Partner's Partnership Interest has been duly and validly
issued and Partner has funded (or will fund before the same is past
due) all capital contributions and advances to the Partnership that are
required by the Partnership Agreement to be funded or advanced prior to
the date hereof and the Closing Date.
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3.1.3 LITIGATION. Except as disclosed in the Partnership
Interest Purchase Agreement and the schedules thereto, there is no
action, claim, demand, suit, proceeding, arbitration, grievance,
citation, summons, subpoena, inquiry or investigation of any nature,
civil, criminal, regulatory or otherwise, in law or in equity, pending
or threatened against or relating to Billing or against or relating to
the transactions contemplated by this Agreement, and the Partners do
not know or have reason to be aware of any basis for the same. Except
as disclosed in the Partnership Interest Purchase Agreement and the
schedules thereto, no citations, fines or penalties have been asserted
against Billing under any Environmental Law (as defined in the
Partnership Interest Purchase Agreement) or any foreign, federal, state
or local law relating to occupational health or safety.
3.1.4 BROKERS AND FINDERS. All negotiations relating to this
Agreement and the transactions contemplated hereby have been carried on
without the participation of any person acting on behalf of Partners in
such manner as to give rise to any valid claim against ACI or Merger
Sub for any brokerage or finder's commission, fee or similar
compensation.
3.1.5 DISCLOSURE. No representation or warranty by either
Partner in this Agreement or by Billing or any Selling Partner (as
defined in the Partnership Interest Purchase Agreement) in the
Partnership Interest Purchase Agreement or any statement or certificate
furnished or to be furnished by or on behalf of Partner, Billing or any
Selling Partner to ACI or Merger Sub or their representatives in
connection herewith or therewith or pursuant hereto or thereto contains
or will contain any untrue statement of a material fact, or omits or
will omit to state any material fact required to make the statements
contained herein or therein not misleading. There is no fact (other
than matters of a general economic or political nature which do not
affect the business of Billing uniquely) known to any Partner that has
not been disclosed by Billing or any Selling Partner to ACI that might
reasonably be expected to have or result in a Material Adverse Effect
(as defined in the Partnership Interest Purchase Agreement).
SECTION 3.2 REPRESENTATIONS AND WARRANTIES OF MERGER SUB. Merger Sub
and ACI, jointly and severally, represent and warrant to the Partners that:
3.2.1 CORPORATE STATUS AND AUTHORIZATION. Merger Sub is a corporation
duly organized, validly existing and in good standing, under the laws
of the State of Texas, the jurisdiction of its incorporation, with full
corporate power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. ACI is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware,
with full corporate power and authority to execute and deliver this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery by Merger
Sub and ACI of this Agreement, and the consummation of the transactions
contemplated hereby, have been, and on the Closing Date, the execution
and delivery by the Merger Sub and ACI of the Collateral Agreements
will have been, duly authorized
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by all requisite corporate action. Merger Sub and ACI have duly
executed and delivered this Agreement. This Agreement is, valid and
legally binding obligations of Merger Sub and ACI, enforceable against
Merger Sub and ACI in accordance with their respective terms.
3.2.2 NO CONFLICTS, ETC. The execution, delivery and
performance by Merger Sub of this Agreement and the consummation of the
transactions contemplated hereby, do not and will not conflict with or
result in a violation of or under (with or without the giving of notice
or the lapse of time, or both) (i) the articles of incorporation or
by-laws or other organizational documents of Merger Sub or ACI, (ii)
any applicable law applicable to Merger Sub, ACI or any of their
affiliates or any of their properties or assets or (iii) any contract,
agreement or other instrument applicable to Merger Sub, ACI or any of
their affiliates or any of their properties or assets, except, in the
case of clause (iii), for violations and defaults that, individually
and in the aggregate, have not and will not materially impair the
ability of ACI or Merger Sub to perform their obligations under this
Agreement or to consummate the transactions contemplated hereby. No
governmental approval is required to be obtained or made by Merger Sub
or ACI in connection with the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
3.2.3 LITIGATION. There is no action, claim, suit or
proceeding pending, or to Merger Sub's or ACI's knowledge threatened,
by or against or affecting Merger Sub or ACI in connection with or
relating to the transactions contemplated by this Agreement or of any
action taken or to be taken in connection herewith or the consummation
of the transactions contemplated hereby.
3.2.4 BROKERS AND FINDERS. All negotiations relating to this
Agreement and the transactions contemplated hereby have been carried on
without the participation of any person acting on behalf of Merger Sub,
ACI or any of their affiliates in such manner as to give rise to any
valid claim against any Partner for any brokerage or finder's
commission, fee or similar compensation.
3.2.5 DISCLOSURE. No representation or warranty by ACI or
Merger Sub contained in this Agreement or any statement or certificate
furnished or to be furnished by or on behalf of ACI or Merger Sub to
the Partners or their representatives in connection herewith or
pursuant hereto contains or will contain any untrue statement of a
material fact, or omits or will omit to state any material fact
required to make the statements contained herein or therein not
misleading. There is no fact (other than matters of a general economic
or political nature which do not affect its business uniquely) known to
ACI or Merger Sub that has not been disclosed by ACI and Merger Sub to
the Partners that might reasonably be expected to have or result in a
Material Adverse Effect.
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ARTICLE 4
ADDITIONAL AGREEMENTS
SECTION 4.1 INDEMNIFICATION. Each Partner agrees to indemnify, defend
and hold harmless ACI and Merger Sub and each of its partners, shareholders,
directors, officers and affiliates, on demand, for any damage, loss, cost, or
expense (including attorneys' fees and costs of investigation incurred in
defending against or settling such damage, loss, cost or expense) reasonably
incurred by ACI or Merger Sub arising out of or in connection with any breach of
any representation, warranty, agreement or covenant of either Partner under this
Agreement. ACI and Merger Sub agree to indemnify, defend and hold harmless the
Partners and each of their partners, shareholders, directors, officers and
affiliates, on demand, for any damage, loss, cost, or expense (including
attorneys' fees and costs of investigation incurred in defending against or
settling such damage, loss, cost or expense) reasonably incurred by the Partners
arising out of or in connection with any breach of any representation, warranty,
agreement or covenant of ACI or Merger Sub under this Agreement.
SECTION 4.2 CLOSING DOCUMENTS; REASONABLE EFFORTS. Subject to the terms
and conditions of this Agreement, the Partners and Merger Sub shall use all
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper or advisable under applicable
laws and regulations, to carry out the purposes and intent of this Agreement in
accordance with the terms hereof, including cooperating fully with the other
party, providing information reasonably required, and making of all necessary
filings, in each case, as expeditiously as is reasonably practicable. In case at
any time after the Closing any further action is required or reasonably
necessary or desirable to carry out the purposes and intent of this Agreement,
the Partners and Merger Sub shall take all such actions required or reasonably
necessary or desirable to the extent permitted under applicable laws and
regulations.
SECTION 4.3 NOTICE OF BREACH. In the event of, and promptly after, the
taking of any action or the impending or threatened occurrence of any event, the
taking or occurrence of which would make untrue, inaccurate or misleading, or
would constitute or result in a breach or violation of, any of the
representations, warranties, covenants or agreements set forth in this
Agreement, the breaching party shall promptly give detailed written notice
thereof to the other party hereto. The breaching party shall promptly correct in
writing any such untrue, inaccurate or misleading representation warranty,
covenant or agreement, and shall use its best efforts to prevent or remedy
promptly any such breach, and, in any event, shall promptly complete or correct
in writing any information affected by any such breach.
SECTION 4.4 SALE OR ENCUMBRANCE OF PARTNERSHIP INTERESTS. Neither
Partner shall sell, transfer, assign or allow any Lien to be placed on such
Partner's Partnership Interest prior to the expiration of the Option Term and
during any time period thereafter that Merger Sub could acquire the Partnership
Interests under the Second Option.
SECTION 4.5 TAX ALLOCATION DISTRIBUTION. Subject to the partnership
agreement and applicable laws and so long as ACI shall directly or indirectly
elect the general partner, ACI shall
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cause the general partner of the Partnership to distribute an amount of cash
sufficient to enable each partner to pay its portion of federal income tax
arising from its allocable share of Partnership activities, assuming the highest
marginal tax rate under Section 1 of the Internal Revenue Code of 1986, as
amended from time to time.
SECTION 4.6 WITHDRAWAL OF CAPITAL. In connection with the consummation
of the HOLD Merger Agreement, a balance sheet of the Partnership is to be
prepared and is to contain a separate statement detailing the capital accounts
of the Partners as at the closing of HOLD Merger Agreement (the "Merger Closing
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Date"), in accordance with the regulations of the Internal Revenue Code of 1986,
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as amended. Merger Sub shall cause the Partnership to distribute to the Partners
cash in the amount equal to their respective positive capital account balances,
if any, on the Merger Closing Date. Such distributions shall be made by the
Partnership in four equal installments beginning on the first day of the
calendar quarter beginning after the date of the balance sheet referred to
herein is provided to ACI, and on the first day of the next three calendar
quarters thereafter. The Partnership shall not be required to make a
distribution to the Partners if (i) such distribution would reduce either of the
capital accounts of the Partners to less than zero, or (ii) if to do so would
materially adversely affect the cash flow requirements of the Partnership. If
either condition shall exist on any distribution date, that distribution date
and all future distribution dates shall be automatically extended for one
calendar quarter.
SECTION 4.7 LINE OF CREDIT. ACI shall use its reasonable best efforts
to (i) maintain Billings existing line of credit or (ii) replace such line of
credit with comparable financing.
ARTICLE 5
GENERAL PROVISIONS
SECTION 5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties contained in this Agreement shall survive the
execution and delivery of this Agreement, any examination by or on behalf of the
parties hereto and the completion of the transactions contemplated herein and
shall be true and correct on the Closing Date and the closing date of the Second
Option.
SECTION 5.2 SEVERABILITY. If any provision of this Agreement, including
any phrase, sentence, clause, Section or subsection is inoperative or
unenforceable for any reason, such circumstances shall not have the effect of
rendering the provision in question inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or provisions herein
contained invalid, inoperative, or unenforceable to any extent whatsoever.
SECTION 5.3 NOTICES. All notices, requests, demands, waivers and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been duly given if (a) delivered
personally, (b) mailed by first-class, registered or
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certified mail, return receipt requested, postage prepaid, or (c) sent by
next-day or overnight mail or delivery or (d) sent by telecopy or telegram,
(a) if to Merger Sub or ACI, to:
Avery Communications, Inc.
801 Greenview Drive
Grand Prairie, Texas 75050
Attention: Patrick J. Haynes, III
with a copy to:
Bruce A. Cheatham, Esq.
Winstead Sechrest & Minick P.C.
1201 Elm Street, Suite 5400
Dallas, Texas 75270
(b) if to Partners, to:
Harold D. Box or
David W. Mechler, Jr.
8000 Vantage Building A, Suite 2001
San Antonio, Texas 78230
with a copy to:
David Turlington, Esq.
P. O. Box 46068
San Antonio, Texas 78246
(210)342-0257
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been received (w) if by personal delivery on the day
after such delivery, (x) if by certified or registered mail, on the seventh
business day after the mailing thereof, (y) if by next-day or overnight mail or
delivery, on the day delivered, (z) if by telecopy or telegram, on the next day
following the day on which such telecopy or telegram was sent, provided that a
copy is also sent by certified or registered mail.
SECTION 5.4 HEADINGS. The headings contained in this Agreement are for
purposes of convenience only and shall not affect the meaning or interpretation
of this Agreement.
SECTION 5.5 ENTIRE AGREEMENT. This Agreement and the Partnership
Interest Purchase Agreement and the schedules hereto constitute the entire
agreement and supersede all prior
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agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof.
SECTION 5.6 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed an original and all of which shall
together constitute one and the same instrument.
SECTION 5.7 GOVERNING LAW, ETC. This Agreement shall be governed in all
respects, including as to validity, interpretation and effect, by the internal
laws of the State of Texas, without giving effect to the conflict of laws rules
thereof. ACI, Merger Sub, and each Partner hereby irrevocably submit to the
jurisdiction of the courts of the State of Texas and the Federal courts of the
United States of America located in the State of Texas, City and County of
Dallas, solely in respect of the interpretation and enforcement of the
provisions of this Agreement and of the documents referred to in this Agreement,
and hereby waive, and agree not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof or of any such document,
that it is not subject thereto or that such action, suit or proceeding may not
be brought or is not maintainable in said courts or that the venue thereof may
not be appropriate or that this Agreement or any of such document may not be
enforced in or by said courts, and the parties hereto irrevocably agree that all
claims with respect to such action or proceeding shall be heard and determined
in such a Texas State or Federal court. ACI, Merger Sub, and each Partner hereby
consent to and grant any such court jurisdiction over the person of such parties
and over the subject matter of any such dispute and agree that mailing of
process or other papers in connection with any such action or proceeding in the
manner provided in Section 5.3, or in such other manner as may be permitted by
law, shall be valid and sufficient service thereof.
SECTION 5.8 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns.
SECTION 5.9 ASSIGNMENT. This Agreement shall not be assignable or
otherwise transferable by any party hereto without the prior written consent of
the other parties hereto; provided, however, that ACI may assign this Agreement
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to Merger Sub and its successors and assigns, and ACI and Merger Sub may assign
this Agreement to any lender to ACI or any subsidiary or affiliate thereof as
security for obligations to such lender in respect of the financing arrangements
entered into in connection with the transactions contemplated hereby and any
refinancings, extensions, refundings or renewals thereof; and, provided,
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further, that no assignment to any such lender shall in any way affect ACI's or
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Merger Sub's obligations or liabilities under this Agreement.
SECTION 5.10 NO THIRD PARTY BENEFICIARIES. Except as provided in
Section 4.1 with respect to indemnification, nothing in this Agreement shall
confer any rights upon any person or entity other than the parties hereto and
their respective heirs, successors and permitted assigns.
SECTION 5.11 AMENDMENT; WAIVERS, ETC. No amendment, modification or
discharge of this Agreement, and no waiver hereunder, shall be valid or binding
unless set forth in writing and duly executed by the party against whom
enforcement of the amendment, modification, discharge
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or waiver is sought. Any such waiver shall constitute a waiver only with respect
to the specific matter described in such writing and shall in no way impair the
rights of the party granting such waiver in any other respect or at any other
time. Neither the waiver by any of the parties hereto of a breach of or a
default under any of the provisions of this Agreement, nor the failure by any of
the parties, on one or more occasions, to enforce any of the provisions of this
Agreement or to exercise any right or privilege hereunder, shall be construed as
a waiver of any other breach or default of a similar nature, or as a waiver of
any of such provisions, rights or privileges hereunder. The rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies
that any party may otherwise have at law or in equity. The rights and remedies
of any party based upon, arising out of or otherwise in respect of any
inaccuracy or breach of any representation, warranty, covenant or agreement or
failure to fulfill any condition shall in no way be limited by the fact that the
act, omission, occurrence or other state of facts upon which any claim of any
such inaccuracy or breach is based may also be the subject matter of any other
representation, warranty, covenant or agreement as to which there is no
inaccuracy or breach. The representations and warranties of Partners shall not
be affected or deemed waived by reason of any investigation made by or on behalf
of Merger Sub or ACI (including by any of their respective advisors, consultants
or representatives) or by reason of the fact that Merger Sub or ACI or any of
such advisors, consultants or representatives knew or should have known that any
such representation or warranty is or might be inaccurate. The representations
and warranties of Merger Sub and ACI shall not be affected or deemed waived by
reason of any investigation made by or on behalf of Partners (including by any
of their respective advisors, consultants or representatives) or by reason of
the fact that Partners or any of such advisors, consultants or representatives
knew or should have known that any such representation or warranty is or might
be inaccurate.
SECTION 5.12 CONVEYANCE OF GENERAL PARTNER. If the transactions
contemplated by Section 3.1.10 of the Partnership Interest Purchase Agreement be
consummated as therein provided, each and every representation, warranty, term,
condition and other provision of this Agreement affected thereby shall be deemed
to be automatically modified to reflect properly and give effect to the
consummation of such transactions.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the date first above written.
AVERY COMMUNICATIONS, INC.
By:________________________________
Patrick J. Haynes, III
Chairman of the Board
AVERY ACQUISITION SUB, INC.
By:________________________________
Patrick J. Haynes, III
Chairman of the Board
PARTNERS:
___________________________________
Harold D. Box
___________________________________
David W. Mechler, Jr.
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