EXHIBIT 10.3
PURCHASE AGREEMENT
Dated: June 27, 1996
BETWEEN
CENTENNIAL COMMUNICATIONS CORP.
and
CENTENNIAL FUND IV, L.P.
TELECOM PARTNERS, L.P.
CENTENNIAL HOLDINGS, INC.
TRAILHEAD VENTURES, L.P.
BOULDER VENTURES, L.P.
GC&H INVESTMENTS
MGVF II, LTD.
XXXX XXXXXX
XXXXXX XXXXXXXX
XXXX X. XXXXXX
TABLE OF CONTENTS
1. Authorization and Closing.
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A. Authorization of the Preferred Stock.............................. 1
B. Purchase and Sale of the Preferred Stock.......................... 1
C. The Closing....................................................... 1
D. Subsequent Closings............................................... 1
2. Conditions of Each Purchaser's Obligations at the Closing.......... 2
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A. Representations and Warranties.................................... 2
B. Certificate of Designation........................................ 2
C. Registration Agreement............................................ 2
D. Stockholders Agreement............................................ 2
E. Amended and Restated Stockholders Agreement....................... 2
F. Sale of Preferred Stock to Each Purchaser......................... 3
G. Blue Sky Clearances............................................... 3
H. Disqualified Persons.............................................. 3
I. Opinion of the Company's Counsel.................................. 3
J. Closing Documents................................................. 3
K. Proceedings....................................................... 4
L. Waiver............................................................ 4
M. Expenses.......................................................... 4
3. Covenants.......................................................... 4
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A. Financial Statements and Other Information........................ 4
i
B. Inspection of Property........................................... 7
C. Attendance at Board Meetings..................................... 7
D. Designation of Directors......................................... 8
E. Restrictions..................................................... 8
F. Affirmative Covenants............................................ 10
G. Compliance with Agreements....................................... 11
H. Current Public Information....................................... 11
I. Reservation of Common Stock...................................... 11
J. Enforcement of Other Agreements.................................. 11
K. Proprietary Rights............................................... 12
L. Limited First Refusal Rights..................................... 12
M. Qualified Small Business......................................... 13
N. Unrelated Taxable Income......................................... 13
O. Investments in United States Real Property Interests............. 13
4. Transfer of Restricted Securities................................. 13
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5. Representations and Warranties of the Company..................... 14
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A. Organization and Corporate Power................................. 14
B. Capital Stock and Related Matters................................ 14
C. Subsidiaries; Investments........................................ 15
D. Authorization; No Breach......................................... 16
E. Financial Statements............................................. 16
F. Absence of Undisclosed Liabilities............................... 17
G. No Material Adverse Change....................................... 17
H. Absence of Certain Developments.................................. 17
ii
I. Assets............................................................ 18
J. Tax Matters....................................................... 19
K. Contracts and Commitments......................................... 19
L. Proprietary Rights................................................ 21
M. Litigation, etc................................................... 21
N. Brokers........................................................... 22
O. Governmental Consent, etc......................................... 22
P. Insurance......................................................... 22
Q. Employees and ERISA............................................... 22
R. Compliance with Laws.............................................. 23
S. Affiliated Transactions........................................... 23
T. Disclosure........................................................ 23
U. Closing Date...................................................... 24
6.Definitions......................................................... 24
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7. Miscellaneous...................................................... 26
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A. Expenses.......................................................... 26
B. Remedies.......................................................... 26
C. Purchaser's Investment Representations............................ 27
D. Treatment of the Preferred Stock.................................. 28
E. Consent to Amendments............................................. 28
F. Survival of Representations and Warranties........................ 28
G. Successors and Assigns............................................ 28
H. Capital and Surplus; Special Reserves............................. 28
I. Severability...................................................... 29
iii
J. Counterparts..................................................... 29
K. Descriptive Headings; Interpretation............................. 29
L. Governing Law.................................................... 29
M. Notices.......................................................... 00
X. Xxxxxxxxxxxxx Xxxxx the Purchasers............................... 30
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PURCHASE AGREEMENT
THIS AGREEMENT is made as of June 27, between Centennial Communications
Corp., a Delaware corporation (the "Company"), and the Persons listed on the
Schedule of Purchasers attached hereto (collectively referred to herein as the
"Purchasers" and individually as a "Purchaser"). Except as otherwise indicated
herein, capitalized terms used herein are defined in Section 6 hereof.
The parties hereto agree as follows:
1. Authorization and Closing.
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A. Authorization of the Preferred Stock. The Company shall authorize
the issuance and sale to the Purchasers of 345 shares of its Series A Preferred
Stock, par value $.01 per share (the "Preferred Stock"), having the rights and
preferences set forth in Exhibit A attached hereto. The Preferred Stock is
---------
convertible into shares of the Company's Common Stock, par value $.01 per share
(the "Common Stock").
B. Purchase and Sale of the Preferred Stock. At each Closing (as
defined below) the Company shall sell to each Purchaser and, subject to the
terms and conditions set forth herein, each Purchaser shall purchase from the
Company the number of shares of Preferred Stock set forth opposite such
Purchaser's name on the Schedule of Purchasers attached hereto at a price of
$25,000 per share. The sale of Preferred Stock to each Purchaser shall
constitute a separate sale hereunder.
C. The Closing. Any closing of the separate purchase and sales of the
Preferred Stock shall take place at such place and on such date as may be
mutually agreeable to the Company and each Purchaser making a purchase of
Preferred Stock. The initial closing (the "Initial Closing") shall take place
at the officer of Holland & Xxxx LLP at 9:00 a.m. on June 27, 1996 or at such
other place and on such other date as may be mutually agreeable to the Company
and each Purchaser. Additional purchases may be made at a subsequent closing
(the "Subsequent Closing," whether there are one or more such closings). (The
Initial Closing and each Subsequent Closing are referred to as a "Closing.") At
each Closing, the Company shall deliver to each Purchaser stock certificates
evidencing the Preferred Stock to be purchased by such Purchaser, registered in
such Purchaser's or its nominees name, upon payment of the purchase price
thereof by a cashier's or certified check, or by wire transfer of immediately
available funds to an account to be designated by the Company.
D. Subsequent Closings. At any time or times after the Initial
Closing until July 31, 1996, the Company may sell additional shares of Preferred
Stock to additional purchasers (the "Additional Purchasers") on the same terms
and conditions as such Preferred Stock is being sold to the Purchasers. If such
additional sales are made,
(i) a Supplementary Schedule of Purchasers listing the Additional Purchasers and
the number of shares of Preferred Stock being purchased by each will be prepared
and (ii) the Additional Purchasers will sign counterpart signature pages to this
Agreement, the Registration Agreement (as defined below) and the Stockholders
Agreement (as defined below). The parties to this Agreement also agree to
execute such documents and take all other actions necessary to permit the
Additional Purchasers to become parties to this Agreement, the Registration
Agreement and the Stockholders Agreement. At any Subsequent Closing the Company
will deliver to the Additional Purchasers copies of all documents delivered at
the Initial Closing.
2. Conditions of Each Purchaser's Obligations at the Closing. The
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obligation of each Purchaser to purchase and pay for the Preferred Stock at each
Closing is subject to the satisfaction as of the Closing of the following
conditions:
A. Representations and Warranties. The representations and warranties
contained in Section 5 hereof shall be true and correct in all material respects
at and as of the Closing as though then made, except to the extent of changes
caused by the transactions expressly contemplated herein.
B. Certificate of Designation. The Company shall have duly adopted,
executed and filed with the Secretary of State of Delaware an amended and
restated Certificate of Incorporation containing a Certificate of Designation of
Rights and Preferences (the "Certificate of Designation") establishing the terms
and the relative rights and preferences of the Preferred Stock in the form set
forth in Exhibit A hereto (the "Certificate of Incorporation"), and the Company
---------
shall not have adopted or filed any other document designating terms, relative
rights or preferences of its preferred stock. The Certificate of Incorporation
shall be in full force and effect as of the Closing under the laws of Delaware
and shall not have been amended or modified.
C. Registration Agreement. The Company, the Purchasers and the
holders of the Common Stock shall have entered into a registration agreement in
form and substance as set forth in Exhibit B attached hereto (the "Registration
---------
Agreement"), and the Registration Agreement shall be in full force and effect as
of the Closing.
D. Stockholders Agreement. The Company, the Purchasers and each major
holder of Common Stock shall have entered into a stockholders agreement in form
and substance set forth in Exhibit C attached hereto (the "Stockholders
---------
Agreement"), and the Stockholders Agreement shall be in full force and effect as
of the Closing.
E. Amended and Restated Stockholders Agreement. The Company and the
existing holders of Common Stock shall have entered into an Amended and Restated
Original Stockholders Agreement in form and substance set forth in Exhibit D
attached hereto (the "Initial Stockholders Agreement") and the Initial
Stockholders Agreement shall be in full force and effect as of the Closing.
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F. Sale of Preferred Stock to Each Purchaser. The Company shall have
sold to each Purchaser the Preferred Stock to be purchased by it hereunder at
the Closing and shall have received payment therefor in full of at least
$5,000,000 in the aggregate at each Closing.
G. Blue Sky Clearances. The Company shall have made all filings under
applicable state securities laws necessary to consummate the issuance of the
Preferred Stock pursuant to this Agreement in compliance with such laws.
H. Disqualified Persons. The Company shall have provided Centennial
Fund IV, L.P. ("Centennial") a certification of the direct and indirect holdings
of securities of the Company by certain persons designated by Centennial as
required by Centennial's governing documents.
I. Opinion of the Company's Counsel. Each Purchaser shall have
received from Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx, counsel for the Company,
an opinion with respect to the matters set forth in Exhibit E attached hereto,
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which shall be addressed to each Purchaser, dated the date of the Initial
Closing and in form and substance reasonably satisfactory to each Purchaser.
J. Closing Documents. The Company shall have delivered to each
Purchaser all of the following documents:
(i) an Officer's Certificate, dated the date of the Closing,
stating that the conditions specified in Section 1 and paragraphs 2.A through
2.H., inclusive, have been fully satisfied;
(ii) certified copies of (a) the resolutions duly adopted by the
Company's board of directors authorizing the execution, delivery and performance
of this Agreement, the Registration Agreement and each of the other agreements
contemplated hereby, the filing of the amendment to the Certificate of
Incorporation referred to in paragraph 2.B., the issuance and sale of the
Preferred Stock, the reservation of a sufficient number of shares of Common
Stock for issuance upon conversion of all of the outstanding shares of the
Preferred Stock and the consummation of all other transactions contemplated by
this Agreement, and (b) the resolutions duly adopted by the Company's
stockholders adopting the amendment to the Certificate of Incorporation referred
to in paragraph 2.B.;
(iii) certified copies of the Certificate of Incorporation and the
Company's bylaws, each as in effect at the Closing;
(iv) copies of all third party and governmental consents, approvals
and filings required in connection with the consummation of the transactions
hereunder (including, without limitation, all blue sky filings and waivers of
all preemptive rights and rights of first refusal);
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K. Proceedings. All corporate and other proceedings taken or required
to be taken in connection with the transactions contemplated hereby to be
consummated at or prior to the Closing and all documents incident thereto shall
be reasonably satisfactory in form and substance to each Purchaser and its
special counsel.
L. Waiver. Any condition specified in this Section 2 may be waived if
consented to by each Purchaser; provided that no such waiver shall be effective
against any Purchaser unless it is set forth in a writing executed by each
Purchaser.
M. Expenses. The Company shall have reimbursed the Purchasers for the
fees and expenses of their special counsel as provided in paragraph 8.A. hereof.
3. Covenants.
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A. Financial Statements and Other Information . The Company shall
deliver to each Purchaser (so long as such Purchaser holds any Preferred Stock
or any Underlying Common Stock) and to each holder of at least 10% of the
Underlying Common Stock:
(i) as soon as available but in any event within 30 days after
the end of each monthly accounting period in each fiscal year, unaudited
consolidating and consolidated statements of income and cash flows of the
Company and its Subsidiaries for such monthly period and for the period from the
beginning of the fiscal year to the end of such month, and consolidating and
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such monthly period, setting forth in each case comparisons to the annual budget
and to the corresponding period in the preceding fiscal year, and all such
statements shall be prepared in accordance with generally accepted accounting
principles, consistently applied, subject to the exclusion of footnote
disclosure and normal year-end audit adjustments;
(ii) as soon as available but in any event within 45 days after the
end of each quarterly accounting period in each fiscal year, unaudited
consolidating and consolidated statements of income and cash flows of the
Company and its Subsidiaries for such quarterly period and for the period from
the beginning of the fiscal year to the end of such quarter, and consolidating
and consolidated balance sheets of the Company and its subsidiaries as of the
end of such quarterly period, setting forth in each case comparisons to the
annual budget and to the corresponding period in the preceding fiscal year, and
all such statements shall be prepared in accordance with generally accepted
accounting principles, consistently applied, subject to the exclusion of
footnote disclosure and normal year-end audit adjustments;
(iii) within 90 days after the end of each fiscal year, consolidated
and consolidating statements of income and cash flows of the Company and its
Subsidiaries for such fiscal year, and consolidating and consolidated balance
sheets of the Company and its Subsidiaries as of the end of such fiscal year,
setting forth in each case comparisons to the annual budget and to the preceding
fiscal year, all prepared in
4
accordance with generally accepted accounting principles, consistently applied,
and accompanied by (a) with respect to the consolidated portions of such
statements, an opinion of an independent accounting firm of recognized national
standing, (b) a certificate from such accounting firm, addressed to the
Company's board of directors, stating that in the course of its examination
nothing came to its attention that caused it to believe that there was an Event
of Noncompliance in existence or that there was any other default by the Company
or any Subsidiaries in the fulfillment of or compliance with any of the terms,
covenants, provisions or conditions of any other material agreement to which the
Company or any Subsidiaries is a party or, if such accountants have reason to
believe any Event of Noncompliance or other default by the Company or any
Subsidiaries exists, a certificate specifying the nature and period of existence
thereof, and (c) a copy of such firm's annual management letter to the board of
directors;
(iv) promptly upon receipt thereof, any additional reports,
management letters or other detailed information concerning significant aspects
of the Company's operations or financial affairs given to the Company by its
independent accountants (and not otherwise contained in other materials provided
hereunder);
(v) at least 30 days (but not more than 90 days) prior to the
beginning of each fiscal year, (a) an annual budget prepared on a monthly basis
for the Company and its Subsidiaries for such fiscal year (displaying
anticipated statements of income and cash flows and balance sheets), (b) a five
year strategic plan for the subsequent five fiscal years of the Company, and
promptly upon preparation thereof any other significant budgets or plans
prepared by the Company and any revisions of such annual or other budgets or
five year strategic plan or other plans, and within 30 days after any monthly
period in which there is a material adverse deviation from the annual budget, an
Officer's Certificate explaining the deviation and what actions the Company has
taken and proposes to take with respect thereto;
(vi) promptly (but in any event within five business days) after
the discovery or receipt of notice of any default under any material agreement
to which it or any of its Subsidiaries is a party or any other material adverse
event or circumstance affecting the Company or any Subsidiaries (including the
filing of any material litigation against the Company or any Subsidiaries or the
existence of any dispute with any Person which involves a reasonable likelihood
of such litigation being commenced), an Officer's Certificate specifying the
nature and period of existence thereof and what actions the Company and its
Subsidiaries have taken and propose to take with respect thereto;
(vii) within ten days after transmission thereof, copies of all
financial statements, proxy statements, reports and any other general written
communications which the Company sends to its stockholders and copies of all
registration statements and all regular, special or periodic reports which it
files, or (to its knowledge) any of its officers or directors file with respect
to the Company, with the Securities and Exchange Commission or with any
securities exchange on which any of its securities are then listed, and copies
of all press releases and other statements made
5
available generally by the Company to the public concerning material
developments in the Company's businesses; and
(viii) with reasonable promptness, such other information and
financial data concerning the Company and its Subsidiaries as any Person
entitled to receive information under this paragraph 3.A. may reasonably
request.
Each of the financial statements referred to in subparagraph (i), (ii) and (iii)
shall fairly present the financial condition and results of operation as of the
dates and for the periods stated therein, subject in the case of the unaudited
financial statements to changes resulting from normal year-end audit adjustments
(none of which would, alone or in the aggregate, be materially adverse to the
financial condition, operating results, assets, operations or business prospects
of the Company and its Subsidiaries taken as a whole).
Notwithstanding the foregoing, the provisions of this paragraph 3.A. shall
cease to be effective so long as the Company (a) is subject to the periodic
reporting requirements of the Securities Exchange Act and continues to comply
with such requirements and (b) promptly provides to each Person otherwise
entitled to receive information pursuant to this paragraph 3.A. all reports and
other materials filed by the Company with the Securities and Exchange Commission
pursuant to the periodic reporting requirements of the Securities Exchange Act;
provided that so long as any Preferred Stock remains outstanding, the Company
shall continue to deliver to each Purchaser (so long as such Purchaser holds any
Preferred Stock) and to each holder of at least 10% of the outstanding Preferred
Stock the information specified in subparagraphs 3.A.(iii), 3.A.(iv)(b) and
3.A.(vii).
Except as otherwise required by law or judicial order or decree or by any
governmental agency or authority, each Person entitled to receive information
regarding the Company and its Subsidiaries under paragraph 3.A., 3.B. or 3.C.
shall use its best efforts to maintain the confidentiality of all nonpublic
information obtained by it hereunder which the Company has reasonably designated
as proprietary or confidential in nature; provided that each such Person (i)
may, to the extent required by law, disclose such information in connection with
the sale or transfer of any Preferred Stock or Underlying Common Stock if such
Person's transferee agrees in writing to be bound by the provisions hereof, and
(ii) may disclose such information to any partner, subsidiary or parent of such
Person for the purpose of evaluating its investment in the Company so long as
such partner, subsidiary or parent is advised of the confidential nature of the
information.
If a Purchaser is requested to disclose any of the confidential
information, and that Purchaser is advised by counsel that it must disclose such
information or else stand liable for contempt or other penalty or censure, that
Purchaser will promptly notify the Company of such request so that the Company
may seek a protective order or other appropriate remedy. Each Purchaser agrees
to cooperate with the Company, at the Company's expense, in its efforts to
obtain such remedies, but this provision will not be
6
construed to require a Purchaser to undertake litigation or other legal
proceedings. If such protective order or other remedy is not promptly obtained,
such information as, pursuant to the advice of counsel, is required to be
disclosed may be disclosed.
For purposes of paragraphs 3.A., 3.B. and 3.C. hereof, the term "Purchaser"
shall include any partner of a Purchaser who received shares of Preferred Stock
or Underlying Common Stock pursuant to a distribution from or a liquidation of
such Purchaser.
For purposes of this Agreement and the Registration Agreement, all holdings
of Preferred Stock and Underlying Common Stock by Persons who are Affiliates of
each other shall be aggregated for purposes of meeting any threshold tests under
this Agreement and Registration Agreement. "Affiliate" shall have the meaning
set forth in Section 6 hereof and for purposes of meeting such threshold tests
shall include Persons which have received distributions of securities from a
partnership holding such securities.
B. Inspection of Property. The Company shall permit any
representatives designated by any Purchaser (so long as such Purchaser holds any
Underlying Common Stock) or any holder of at least 10% of the Underlying Common
Stock, upon reasonable notice and during normal business hours, to (i) visit and
inspect any of the properties of the Company and its Subsidiaries, (ii) examine
the corporate and financial records of the Company and its Subsidiaries and make
copies thereof or extracts therefrom and (iii) discuss the affairs, finances and
accounts of any such corporations with the directors, officers, key employees
and independent accountants of the Company and its Subsidiaries; provided,
however, the Company shall not be obligated under this Section 3.B with respect
to a competitor of the Company or with respect to information which the board of
directors determines in good faith is confidential and should not, therefore, be
disclosed. The presentation of an executed copy of this Agreement by any
Purchaser to the Company's independent accountants shall constitute the
Company's permission to its independent accountants to participate in
discussions with such Persons.
C. Attendance at Board Meetings. The Company shall give each Purchaser
(so long as such Purchaser holds any Underlying Common Stock) and each holder of
at least 10% of the Underlying Common Stock written notice of each meeting of
its board of directors and each committee thereof at the same time and in the
same manner as notice is given to the directors (which notice shall be confirmed
in writing to each such Person) and the Company shall permit a representative of
each such Person to attend as an observer all meetings of its board of directors
and all committees thereof; provided that in the case of telephonic meetings
conducted in accordance with the Company's bylaws and applicable law, each such
Person's representative shall be given the opportunity to listen to such
telephonic meetings; and provided further that the Company have the right to
exclude the representatives from the entire meeting or portion thereof if
attendance by the representative at such meeting or portion thereof or
dissemination of such information would, in the reasonable determination of the
board of directors materially compromise or adversely affect the attorney-client
privilege or
7
result in a conflict of interest situation. Each representative shall be
entitled to receive all written materials and other information (including,
without limitation, copies of meeting minutes) given to directors in connection
with such meetings at the same time such materials and information are given to
the directors. If the Company proposes to take any action by written consent in
lieu of a meeting of its board of directors or of any committee thereof, the
Company shall give written notice thereof to each such Person prior to the
effective date of such consent describing in reasonable detail the nature and
substance of such action.
D. Designation of Directors. The holders of the Preferred Stock shall
have the right to select representatives to be elected to the Company's board of
directors, as set forth in the Stockholders Agreement. The Company shall use
its best efforts to cause such representatives to be elected to the board of
directors.
E. Restrictions. So long as any of the Preferred Stock remains
outstanding, the Company shall not, without the consent of the holders of a
majority of the Preferred Stock:
(i) directly or indirectly declare or pay any dividends or make any
distributions upon any of its equity securities other than the Preferred Stock
pursuant to the terms of the Certificate of Incorporation, except for dividends
payable in shares of Common Stock issued upon the outstanding shares of Common
Stock;
(ii) directly or indirectly redeem, purchase or otherwise acquire,
or permit any Subsidiaries to redeem, purchase or otherwise acquire, any of the
Company's equity securities (including, without limitation, warrants, options
and other rights to acquire equity securities) other than the Preferred Stock
pursuant to terms of the Certificate of Incorporation and except for repurchases
of Common Stock from employees of the Company and its Subsidiaries upon
termination of employment pursuant to arrangements approved by the Company's
board of directors.
(iii) except as expressly contemplated by this Agreement, authorize,
issue or enter into any agreement providing for the issuance (contingent or
otherwise) of, (a) any notes or debt securities containing equity features
(including, without limitation, any notes or debt securities convertible into or
exchangeable for equity securities, issued in connection with the issuance of
equity securities or containing profit participation features, (b) any equity
securities (or any securities convertible into or exchangeable for any equity
securities) which are senior to or on a parity with the Preferred Stock with
respect to the payment of dividends, redemptions or distributions upon
liquidation or otherwise or (c) any additional shares of Preferred Stock;
(iv) merge or consolidate with any Person or, permit any Subsidiary
to merge or consolidate with any Person (other than a wholly-owned
Subsidiary);
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(v) sell, lease or otherwise dispose of, or permit any Subsidiary
to sell, lease or otherwise dispose of, more than 50% of the consolidated assets
of the Company and its Subsidiaries (computed on the basis of book value,
determined in accordance with generally accepted accounting principles
consistently applied, or fair market value, determined by the Company's board of
directors in its reasonable good faith judgment) in any transaction or series of
related transactions (other than sales in the ordinary course of business) or
sell or permanently dispose of any of its or any Subsidiary's Proprietary
Rights;
(vi) liquidate, dissolve or effect a recapitalization or
reorganization in any form of transaction (including, without limitation) any
reorganization into partnership form); provided that any reorganization in
partnership form shall require the consent of the holders of at least 75% of the
Underlying Common Stock;
(vii) enter into, or permit any Subsidiary to enter into, the
ownership, active management or operation of any business other than wireless
communications and ancillary activities;
(viii) become subject to, or permit any of its Subsidiaries to become
subject to, any agreement or instrument which by its terms would (under any
circumstances) restrict the Company's right to perform the provisions of this
Agreement, the Registration Agreement, the Certificate of Incorporation or the
Company's bylaws (including, without limitation, provisions relating to payment
of dividends on and making redemptions of the Preferred Stock and conversions of
the Preferred Stock);
(ix) except as expressly contemplated by this Agreement, make any
amendment to the Certificate of Incorporation or the Company's bylaws, or file
any resolution of the board of directors with the Delaware Secretary of State
containing any provisions, which would increase the number of authorized shares
of the Preferred Stock or adversely affect or otherwise impair the rights or
relative priority of the holders of the Preferred Stock or the Underlying Common
Stock under this Agreement, the Certificate of Incorporation, the Company's
bylaws or the Registration Agreement;
(x) change the authorized size of its board of directors;
(xi) increase the number of shares of Common Stock issuable
pursuant to stock option plans or stock ownership plans above 15% of the number
of shares of Common Stock outstanding on or before July 31, 1996 (as such number
is proportionately adjusted for stock splits, combinations and dividends
affecting the Common Stock and including all such employee stock options, other
purchase rights and conversion rights outstanding on or before July 31, 1996)
(the "Authorized Management Stock"), otherwise amend or modify any stock option
plan or employee stock ownership plan as in existence as of the Closing (the
"Stock Option Agreements"), adopt any new stock option plan or employee stock
ownership plan or issue any shares of Common
9
Stock to its or its Subsidiaries' employees other than pursuant to
the Company's existing stock option and employee stock ownership plans;
(xii) use the proceeds from the sale of the Preferred Stock other
than for wireless communication activities or such other activities as may be
approved by the board of directors.
F. Affirmative Covenants. So long as any Preferred Stock remains
outstanding, the Company shall, and shall cause each Subsidiary to (unless
waived by the holders of a majority of the Preferred Stock):
(i) at all times cause to be done all things necessary to maintain,
preserve and renew its corporate existence and all material licenses,
authorizations and permits necessary to the conduct of its businesses;
(ii) maintain and keep its properties in good repair, working order
and condition, and from time to time make all necessary and desirable repairs,
renewals and replacements, so that its businesses may be properly and
advantageously conducted at all times;
(iii) pay and discharge when payable all taxes, assessments and
governmental charges imposed upon its properties or upon the income or profits
therefrom (in each case before the same becomes delinquent and before penalties
accrue thereon) and all claims for labor, materials or supplies to the extent to
which the failure to pay or discharge such obligations would reasonably be
expected to have a material adverse effect upon the financial condition,
operating results, assets, operations or business prospects of the Company and
its Subsidiaries taken as a whole, unless and to the extent that the same are
being contested in good faith and by appropriate proceedings and adequate
reserves (as determined in accordance with generally accepted accounting
principles, consistently applied) have been established on its books with
respect thereto;
(iv) comply with all other material obligations which it incurs
pursuant to any contract or agreement, whether oral or written, express or
implied, as such obligations become due unless and to the extent that the same
are being contested in good faith and by appropriate proceedings and adequate
reserves (as determined in accordance with generally accepted accounting
principles, consistently applied) have been established on its books with
respect thereto;
(v) comply with all applicable laws, rules and regulations of all
governmental authorities, the violation of which would reasonably be expected to
have a material adverse effect upon the financial condition, operating results,
assets, operations or business prospects of the Company and its Subsidiaries
taken as a whole;
(vi) apply for and continue in force with good and responsible
insurance companies adequate insurance covering risks of such types and in such
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amounts as are customary for corporations of similar size engaged in similar
lines of business;
(vii) maintain proper books of record and account which fairly
present its financial condition and results of operations and make provisions on
its financial statements for all such proper reserves as in each case are
required in accordance with generally accepted accounting principles,
consistently applied; and
(viii) enter into and maintain nondisclosure and noncompete
agreements with its key employees in the form approved by the board of
directors.
G. Compliance with Agreements. The Company shall perform and observe
(i) all of its obligations to each holder of the Preferred Stock and all of its
obligations to each holder of the Underlying Common Stock set forth in the
Certificate of Incorporation and the Company's bylaws, and (ii) all of its
obligations to each holder of Registrable Securities set forth in the
Registration Agreement.
H. Current Public Information. At all times after the Company has
filed a registration statement with the Securities and Exchange Commission
pursuant to the requirements of either the Securities Act or the Securities
Exchange Act, the Company shall file all reports required to be filed by it
under the Securities Act and the rules and regulations adopted by the Securities
and Exchange Commission thereunder and shall take such further action as any
holder or holders of Restricted Securities may reasonably request, all to the
extent required to enable such holders to sell Restricted Securities pursuant to
(i) Rule 144 adopted by the Securities and Exchange Commission under the
Securities Act (as such rule may be amended from time to time) or any similar
rule or regulations hereunder adopted by the Securities and Exchange Commission,
or (ii) a registration statement on Form S-2 or S-3 or any similar registration
form hereafter adopted by the Securities and Exchange Commission. Upon request,
the Company shall deliver to any holder of Restricted Securities a written
statement as to whether it has complied with such requirements.
I. Reservation of Common Stock. The Company shall at all times reserve
and keep available out of its authorized but unissued shares of Common Stock,
solely for the purpose of issuance upon the conversion of the Preferred Stock,
such number of shares of Common Stock issuable upon the conversion of all
outstanding Preferred Stock. All shares of Common Stock which are so issuable
shall, when issued, be duly and validly issued, fully paid and nonassessable and
free from all taxes, liens and charges. The Company shall take all such actions
as may be necessary to assure that all such shares of Common Stock may be so
issued without violation of any applicable laws or governmental regulation or
any requirements of any domestic securities exchange upon which shares of Common
Stock may be listed (except for official notice of issuance which shall be
immediately transmitted by the Company upon issuance).
J. Enforcement of Other Agreements. The Company shall enforce the
provisions of the Stock Option Agreements.
11
K. Proprietary Rights. The Company shall, and cause each Subsidiary
to, possess and maintain all material Proprietary Rights necessary to the
conduct of their respective businesses and own all right, title and interest in
and to, or have a valid license for, all material Proprietary Rights used by the
Company and each Subsidiary in the conduct of their respective businesses.
Neither the Company nor any Subsidiary shall take any action, or fail to take
any action, which would result in the invalidity, abuse, misuse or
unenforceability of such Proprietary Rights or which would infringe upon any
rights of other Persons.
L. Limited First Refusal Rights.
(i) Except for the issuance of Common Stock (a) to the Company's
employees as contemplated by paragraph 3.D.(xi) hereof, (b) upon the conversion
of the Preferred Stock, (c) in connection with issuance to non-Affiliates of the
Company for consideration other than cash, (d) pursuant to a public offering
registered under the Securities Act or (e) in connection with the acquisition of
another business entity by the Company, (f) in connection with any stock split,
stock dividend, or recapitalization or (g) to a lender or equipment lessor in
connection with any loan or lease financing transaction, if the Company
authorizes the issuance or sale of any shares of Common Stock or any securities
containing options or rights to acquire any shares of Common Stock (other than
as a dividend on the outstanding Common Stock), the Company shall first offer to
sell to each of the holders of Underlying Common Stock its "pro rata portion" of
50% of such stock or securities. A holder's "pro rata portion" shall equal the
quotient determined by dividing (1) the number of shares of Common Stock and
Underlying Common Stock held by each such holder by the (2) sum of the total
number of shares of Underlying Common Stock and Common Stock held by all holders
of Underlying Common Stock. Each holder of Underlying Common Stock shall be
entitled to purchase such stock or securities at the most favorable price and on
the most favorable terms as such stock or securities are to be offered to any
other Persons. The purchase price for all stock and securities offered to the
holders of the Underlying Common Stock shall be payable in cash or, to the
extent otherwise required hereunder, notes issued by such holders.
(ii) In order to exercise its purchase rights hereunder, a holder of
Underlying Common Stock must within 15 days after receipt of written notice from
the Company describing in reasonable detail the stock or securities being
offered, the purchase price thereof, the payment terms and such holder's
percentage allotment deliver a written notice to the Company describing its
election hereunder. If all of the stock and securities offered to the holders of
Underlying Common Stock is not fully subscribed by such holders, the remaining
stock and securities shall be reoffered by the Company to the holders purchasing
their full allotment upon the terms set forth in this paragraph, except that
such holders must exercise their purchase rights within five days after receipt
of such reoffer.
(iii) Upon the expiration of the offering periods described above,
the Company shall be entitled to sell such stock or securities which the holder
of
00
Xxxxxxxxxx Xxxxxx Stock have not elected to purchase during the 90 days
following such expiration on terms and conditions no more favorable to the
purchasers thereof than those offered to such holders. Any stock or securities
offered or sold by the Company after such 90-day period must be reoffered to the
holders of Underlying Common Stock pursuant to the terms of this paragraph.
(iv) The rights under this paragraph shall terminate upon the
effectiveness of a registration statement filed by the Company with the
Securities and Exchange Commission under the Securities Act with respect to an
offering of Common Stock with an aggregate selling price of at least $20,000,000
and a price per share of at least 400% of the conversion price as defined in the
Certificate of Incorporation in effect on the Closing (as adjusted for stock
splits, reverse stock splits, and similar recapitalizations); provided that if
the registration statement is withdrawn or abandoned before any shares of Common
Stock are sold thereunder, the provisions of this paragraph shall remain in
effect.
M. Qualified Small Business. The Company qualifies as a "Qualified
Small Business" as defined in Section 1202(c) of the Internal Revenue Code of
1986, as amended (the "Code") and covenants that, so long as any of the Shares
of Underlying Common Stock are held by a Purchaser in whose hands shares of
Underlying Common Stock are eligible to qualify as Qualified Small Business
Stock as defined in Section 1202(c) of the Code, it will use its best efforts to
cause the shares of Underlying Common Stock to qualify as Qualified Small
Business Stock.
N. Unrelated Taxable Income. Any gross income derived by the
Purchasers from the Company shall be in the form of dividends, interest, capital
gains and losses from the disposition of property, and rents and royalties, but
only such rents and royalties as are excluded pursuant to Code Sections
512(b)(2) and 512(b)(3), respectively, in calculating unrelated business taxable
income and only such dividends, interest, capital gains and losses, and rents
and royalties that are not included under Section 512(b)(4) of the Code in
calculating unrelated business taxable income.
O. Investments in United States Real Property Interests. The Company's
capital stock does not constitute a United States real property interest as that
term is defined in Section 897(c)(1)(A)(ii) of the Code. The preceding
representation is based on a determination by the Company that the Company is
not and has not been a United States real property holding corporation (as that
term is defined in Section 897(c)(2) of the Code) since the date of its
incorporation. The Company shall use its best efforts to ensure that it does
not at any time in the future become a United States real property holding
corporation. If at any time in the future the Company should become a United
States real property holding corporation, the Company shall, as promptly as
possible, notify each Purchaser of such status.
4. Transfer of Restricted Securities.
---------------------------------
13
(i) Restricted Securities are transferable pursuant to (a) public
offerings registered under the Securities Act, (b) Rule 144 of the Securities
and Exchange Commission (or any similar rule then in force) if such rule is
available and (c) subject to the conditions specified in subparagraph (ii)
below, any other legally available means of transfer.
(ii) In connection with the transfer of any Restricted Securities
(other than a transfer described in subparagraph 4(i)(a) or (b) above), the
holder thereof shall deliver written notice to the Company describing in
reasonable detail the transfer or proposed transfer, together with an opinion of
counsel which (to the Company's reasonable satisfaction) is knowledgeable in
securities law matters to the effect that such transfer of Restricted Securities
may be effected without registration of such Restricted Securities under the
Securities Act. In addition, if the holder of the Restricted Securities delivers
to the Company an opinion of counsel that no subsequent transfer of such
Restricted Securities shall require registration under the Securities Act, the
Company shall promptly upon such contemplated transfer deliver new certificates
for such Restricted Securities which do not bear the securities Act legend set
forth in paragraph 7.C. If the Company is not required to deliver new
certificates for such Restricted Securities not bearing such legend, the holder
thereof shall not transfer the same until the prospective transferee has
confirmed to the Company in writing its agreement to be bound by the conditions
contained in this paragraph and paragraph 7.C.
5. Representations and Warranties of the Company. As a material
---------------------------------------------
inducement to the Purchasers to enter into this Agreement and purchase the
Preferred Stock, the Company hereby represents and warrants that:
A. Organization and Corporate Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Delaware and
is qualified to do business in every jurisdiction in which the failure to so
qualify would reasonably be expected to have a material adverse effect on the
financial condition, operating results, assets, operations or business prospects
of the Company and its Subsidiaries taken as a whole. The Company has all
requisite corporate power and authority and all material licenses, permits and
authorizations necessary to own and operate its properties, to carry on its
businesses as now conducted and presently proposed to be conducted and to carry
out the transactions contemplated by this Agreement. The copies of the
Company's and each Subsidiary's charter documents and bylaws which have been
furnished to the Purchasers' special counsel reflect all amendments made thereto
at any time prior to the date of this Agreement and are correct and complete.
B. Capital Stock and Related Matters.
(i) As of the Initial Closing and immediately thereafter, the
authorized capital stock of the Company shall consist of (a) 1,000 shares of
preferred stock, of which 1,000 shares shall be designated as Preferred Stock
(all of which shall be issued and outstanding) and (b) 1,150 shares of Common
Stock, of which 350 shares
14
shall be issued and outstanding and 600 shares shall be reserved for issuance
upon conversion of the Preferred Stock. As of the Closing, neither the Company
nor any Subsidiary shall have outstanding any stock or securities convertible or
exchangeable for any shares of its capital stock or containing any profit
participation features, nor shall it have outstanding any rights or options to
subscribe for or to purchase its capital stock or any stock or securities
convertible into or exchangeable for its capital stock, except for the Preferred
Stock and except as set forth on the attached "Capitalization Schedule." The
Capitalization Schedule accurately sets forth the following with respect to all
outstanding options and rights to acquire the Company's capital stock: the
holder, the number of shares covered, the exercise price and the expiration
date. As of the Closing neither the Company nor any Subsidiary shall be subject
to any obligation (contingent or otherwise) to repurchase or otherwise acquire
or retire any shares of its capital stock or any warrants, options or other
rights to acquire its capital stock, except as set forth on the Capitalization
Schedule and except pursuant to the Certificate of Incorporation. As of the
Closing, all of the outstanding shares of the Company's capital stock shall be
validly issued, fully paid and nonassessable.
(ii) There are no statutory or, to the best of the Company's
knowledge, contractual stockholders preemptive rights or rights of refusal with
respect to the issuance of the Preferred Stock hereunder or the issuance of the
Common Stock upon conversion of the Preferred Stock. The Company has not
violated any applicable federal or state securities laws in connection with the
offer, sale or issuance of any of its capital stock, and the offer, sale and
issuance of the Preferred Stock hereunder do not require registration under the
Securities Act or any applicable state securities laws. To the best of the
Company's knowledge, there are no agreements between the Company's stockholders
with respect to the voting or transfer of the Company's capital stock or with
respect to any other aspect of the Company's affairs, except for the Initial
Stockholders Agreement, and the stock option agreements set forth on the
Capitalization Schedule.
C. Subsidiaries; Investments. The attached "Subsidiary Schedule"
correctly sets forth the name of each Subsidiary, the jurisdiction of its
incorporation and the Persons owning the outstanding capital stock of each
Subsidiary. Each Subsidiary is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has all
requisite corporate power and authority and all material licenses, permits and
authorizations necessary to own its properties and to carry on its businesses as
now being conducted and as presently proposed to be conducted and is qualified
to do business in every jurisdiction in which the failure to so qualify would
reasonably be expected to have a material adverse effect on the financial
condition, operating results, assets, operations or business prospects of the
Company and its Subsidiaries taken as a whole. All of the outstanding shares of
capital stock of each Subsidiary are validly issued, fully paid and
nonassessable, and all such shares are owned by the Company or another
Subsidiary free and clear of any lien, charge or encumbrance. Except as set
forth on the Subsidiary Schedule, neither the Company nor any Subsidiary owns or
holds the right to acquire any shares of stock or any other security or interest
in any other Person.
15
D. Authorization; No Breach. The execution, delivery and performance
of this Agreement, the Registration Agreement and all other agreements
contemplated hereby to which the Company is a party and the filing of the
amendment and restatement of the Certificate of Incorporation have been duly
authorized by the Company. This Agreement, the Registration Agreement, the
amended and restated Certificate of Incorporation (containing the Certificate of
Designation) and all other agreements contemplated hereby each constitutes a
valid and binding obligation of the Company, enforceable in accordance with its
terms. The execution and delivery by the Company of this Agreement, the
Registration Agreement, and all other agreements contemplated hereby to which
the Company is a party, the offering, sale and issuance of the Preferred Stock
hereunder, the issuance of the Common Stock upon conversion of the Preferred
Stock, the filing of the amendment and restatement of the Certificate of
Incorporation and the fulfillment of and compliance with the respective terms
hereof and thereof by the Company, do not and shall not (i) conflict with or
result in a breach of the terms, conditions or provisions of, (ii) constitute a
default under, (iii) result in the creation of any lien, security interest,
charge or encumbrance upon the Company's or any Subsidiary's capital stock or
assets pursuant to, (iv) give any third party the right to accelerate any
obligations under, (v) result in a violation of, or (vi) require any
authorization, consent, approval, exemption or other action by or notice to any
court or administrative or governmental body pursuant to, the amended and
restated Certificate of Incorporation or the bylaws of the Company or any
Subsidiary, or any law, statute, rule or regulation to which the Company or the
charter or bylaws or any Subsidiary is subject, or any agreement, instrument,
order, judgment or decree to which the Company or any Subsidiary is subject.
Except as set forth on the Restrictions Schedule, none of the Subsidiaries is
subject to any restrictions upon making loans or advances or paying dividends
to, transferring property to, or repaying any Indebtedness owed to, the Company
or another Subsidiary.
E. Financial Statements. Attached hereto as the "Financial Statements
Schedule" are the following financial statements:
(i) the unaudited balance sheets of the Company as of December 31,
1995, for the twelve-month period then ended; and
(ii) the unaudited consolidated balance sheet of the Company and its
Subsidiaries as of May 31, 1996 (the "Latest Balance Sheet) for the five-month
period then ended.
Each of the foregoing financial statements (including in all cases the notes
thereto, if any) fairly presents the financial condition and results of
operations at the dates and for the periods indicated, is consistent with the
books and records of the Company (which, in turn, are accurate and complete in
all material respects) and has been prepared in accordance with generally
accepted accounting principles, consistently applied, subject in the case of the
unaudited financial statements to the lack of footnote disclosure and changes
resulting from normal year-end audit adjustments (none of which would, alone
16
or in the aggregate, be materially adverse to the financial condition, operating
results, assets, operations or business prospects of the Company).
F. Absence of Undisclosed Liabilities. Except as set forth on the
attached "Liabilities Schedule," the Company and its Subsidiaries do not have
any material obligation or liability (whether accrued, absolute, contingent,
unliquidated or otherwise, wither or not known to the Company or any Subsidiary,
whether due or to become due and regardless of when asserted) arising out of
transactions entered into at or prior to the Closing, or any action or inaction
at or prior to the Closing, or any state of facts existing at or prior to the
Closing other than: (i) liabilities set forth on the Latest Balance Sheet
(including any notes thereto), (ii) liabilities and obligations which have
arisen after the date of the Latest Balance Sheet in the ordinary course of
business (none of which is a liability resulting from breach of contract,
breach of warranty, tort, infringement, claim or lawsuit) (iii) other
liabilities and obligations (including liabilities and obligations under
executory contracts) expressly disclosed in the other Schedules to this
Agreement and (iv) liabilities under executory contracts not required to be
disclosed on the Contracts Schedule.
G. No Material Adverse Change. Since the date of the Latest Balance
Sheet, there has been no material adverse change in the financial condition,
operating results, assets, operations, business prospects, employee relations or
customer or supplier relations of the Company and its Subsidiaries taken as a
whole.
H. Absence of Certain Developments.
(i) Except as expressly contemplated by this Agreement or as set
forth on the attached "Development Schedule," since the date of the Latest
Balance Sheet, neither the Company has not:
(a) issued any notes, bonds or other debt securities or any
equity securities or any securities convertible, exchangeable or
exercisable into any equity securities;
(b) borrowed any amount or incurred or become subject to any
material liabilities, except current liabilities incurred in the ordinary
course of business and liabilities under contracts entered into in the
ordinary course of business;
(c) discharged or satisfied any material lien or encumbrance or
paid any material obligation or liability, other than current liabilities
paid in the ordinary course of business;
(d) declared or made any payment or distribution of cash or
other property to its stockholders with respect to its stock or purchased
or redeemed any shares of its stock or any warrants, options or other
rights to acquire its stock;
17
(e) mortgaged or pledged any of its properties or assets or
subjected them to any material lien, security interest, charge or other
encumbrance, except liens for current property taxes not yet due and
payable;
(f) sold, assigned or transferred any of its tangible assets,
except in the ordinary course of business, or cancelled any material debts
or claims;
(g) sold, assigned or transferred any patents or patent
applications, trademarks, service marks, trade names, corporate names,
copyrights or copyright registrations, trade secrets or other intangible
assets, or disclosed any proprietary confidential information to any
Person;
(h) suffered any extraordinary losses or waived any right of
material value, whether or not in the ordinary course of business or
consistent with past practice;
(i) made capital expenditures or commitments therefor that
aggregate in excess of $250,000;
(j) entered into any other material transaction, whether or
not in the ordinary course of business;
(k) made any loans or advances to, guarantees for the benefit
of, or any Investments in, any Persons in excess of $250,000 in the
aggregate;
(l) made any charitable contributions or pledges;
(m) suffered any damage, destruction or casualty loss
exceeding in the aggregate $250,000, whether or not covered by insurance;
or
(n) made any Investment in or taken steps to incorporate any
Subsidiary.
(ii) Neither the Company nor any Subsidiary has at any time made any
payments for political contributions or made any bribes, kickback payments or
other illegal payments.
I. Assets. Except as set forth on the "Assets Schedule," the Company
and each Subsidiary have good and marketable title to, or a valid leasehold
interest in, the properties and assets used by them, located on their premises
or shown on the Latest Balance Sheet or acquired thereafter, free and clear of
all liens, security interests, charges and encumbrances, except for properties
and assets disposed of in the ordinary course of business since the date of the
Latest Balance Sheet and except for liens disclosed on the Latest Balance Sheet
(including any notes thereto) and liens for current property taxes not yet due
and payable. Except as described on the Assets Schedule, the Company's and each
Subsidiary's buildings, equipment and other tangible assets are in
18
good operating condition in all materials respects and are fit for use in the
ordinary course of business.
J. Tax Matters. Except as set forth in the attached "Taxes Schedule":
the Company and each Subsidiary have filed all tax returns which they are
required to file; all such returns are true and correct in all material
respects; the Company and each Subsidiary have in all material respects paid all
taxes owed by them and withheld and paid over all taxes which they are obligated
to withhold from amounts owing to any employee, creditor or third party; neither
the Company nor any Subsidiary has waived any statute of limitations with
respect to taxes or agreed to any extension of time with respect to a tax
assessment or deficiency; the assessment of any additional taxes for periods for
which returns have been filed is not expected; the federal income tax returns of
the Company and its Subsidiaries have not been audited; and there are no pending
questions or claims concerning the Company's or any Subsidiary's tax liability.
K. Contracts and Commitments.
(i) Except as expressly contemplated by this Agreement or as set
forth on the attached "Contracts Schedule," as of the Closing, neither the
Company nor any Subsidiary is a party to any written or oral:
(a) pension, profit sharing, stock option, employee stock
purchase or other plan or arrangement providing for deferred or other
compensation to employees or any other employee benefit plan or
arrangement, or any contract with any labor union, or any severance
agreements;
(b) contract for the employment of any officer, individual
employee or other Person on a full-time, part-time, consulting or other
basis providing annual compensation in excess of $100,000 or contract
relating to loans to officers, directors or affiliates;
(c) contract under which the Company or a Subsidiary has advanced
or loaned any other Person amounts in the aggregate exceeding $100,000;
(d) agreement or indenture relating to the borrowing of money or
the mortgaging, pledging or otherwise placing a lien on any material asset
or material group of assets of the Company and its Subsidiaries;
(e) guarantee of any obligation;
(f) lease or agreement under which the Company or any Subsidiary
is lessee of or holds or operates any property, real or personal, owned by
any other party, except for any lease of real or personal property under
which the aggregate annual rental payments do not exceed $25,000;
19
(g) lease or agreement under which the Company or any Subsidiary
is lessor of or permits any third party to hold or operate any property,
real or personal, owned or controlled by the Company or any Subsidiary;
(h) contract or group of related contracts with the same party or
group of affiliated parties the performance of which involves a
consideration in excess of $150,000;
(i) assignment, license, indemnification or agreement with
respect to any intangible property (including, without limitation, any
patent, trademark, trade name, copyright, know-how, trade secret or
confidential information;
(j) warranty agreement with respect to its services rendered or
its products sold or leased;
(k) agreements under which it has granted any Person any
registration rights (including piggyback rights);
(l) contract, agreement or other arrangement with any officer,
director, employee or Affiliate, or any Affiliate of any officer, director
or employee except employment agreements terminable at will;
(m) contract or agreement prohibiting it from freely engaging in
any business or competing anywhere in the world; and
(n) any other agreement which is material to its operations and
business prospects or involves a consideration in excess of $150,000
annually.
(ii) The Company and each Subsidiary have performed all material
obligations required to be performed by them and are not in default under or in
breach of nor in receipt of any claim of default or breach under any material
contract, agreement or instrument to which the Company or any Subsidiary is
subject; no event has occurred which with the passage of time or the giving of
notice or both would result in a default, breach or event of noncompliance under
any material contract, agreement or instrument to which the Company or any
Subsidiary is subject; neither the Company nor any Subsidiary has any present
expectation or intention of not fully performing all such obligations; neither
the Company nor any Subsidiary has knowledge of any breach or anticipated breach
by the other parties to any material contract or commitment to which it is a
party; and neither the Company nor any Subsidiary is a party to any materially
adverse contract or commitment.
(iii) The Purchasers' special counsel has been supplied with a true
and correct copy of each of the written contracts and an accurate description of
the oral contracts which are referred to on the Contracts Schedule, together
with all amendments, waivers or other changes thereto.
20
L. Proprietary Rights. The attached "Proprietary Rights Schedule"
contains a complete and accurate list of (i) all patented and registered
Proprietary Rights owned by the Company or any Subsidiary, (ii) all pending
patent applications and applications for registrations of other Proprietary
Rights filed by the Company or any Subsidiary, (iii) all unregistered trade
names and corporate names owned or used by the Company and its Subsidiaries and
(iv) all unregistered trademarks, service marks and copyrights and computer
software which are material to the financial condition, operating results,
assets, operations or business prospects of the Company and its Subsidiaries
taken as a whole. The Proprietary Rights Schedule also contains a complete and
accurate list of all licenses and other rights granted by the Company or any
Subsidiary to any third party with respect to any Proprietary Rights and all
licenses and other rights granted by any third party to the Company or any
Subsidiary with respect to any Proprietary rights. The Company or one of its
Subsidiaries owns or has the right to use pursuant to a valid license all
Proprietary Rights necessary for the operation of the businesses of the Company
and its Subsidiaries as presently conducted and as presently proposed to be
conducted. The loss or expiration of any Proprietary Right or related group of
Proprietary Rights would not have a material adverse effect on the conduct of
the Company's and its Subsidiaries' respective businesses, and no such loss or
expiration is, to the best of the Company's knowledge, threatened, pending or
reasonably foreseeable. The Company and its Subsidiaries have taken all
necessary actions to maintain and protect the Proprietary Rights which they own
and use. To the best of the Company's knowledge, the owners of any Proprietary
Rights licensed to the Company or any Subsidiary have taken all necessary
actions to maintain and protect the Proprietary Rights which are subject to such
licenses. Except as indicated on the Proprietary Rights Schedule, (i) the
Company and its Subsidiaries own all right, title, and interest in and to all of
the Proprietary Rights listed on such schedule and all other Proprietary Rights
material to the operation of the businesses of the Company and its Subsidiaries,
(ii) there have been no claims made against the Company or any Subsidiary
asserting the invalidity, misuse or unenforceability of any of such rights, and,
to the best of the Company's knowledge, there are no grounds for the same, (iii)
neither the Company nor any Subsidiary has received a notice of conflict with
the asserted rights of others, and (iv) the conduct of the Company's and each
Subsidiary's business has not infringed or misappropriated and does not infringe
or misappropriate any Proprietary Rights of other Persons, nor would any future
conduct as presently contemplated infringe any Proprietary Rights of other
Persons and, to the best of the Company's knowledge, the Proprietary Rights
owned by the Company or any Subsidiary have not been infringed or
misappropriated by other Persons.
M. Litigation, etc. There are no actions, suits, proceedings, orders,
investigations or claims pending or, to the best of the Company's knowledge,
threatened against or affecting the Company or any Subsidiary (or to the best of
the Company's knowledge, pending or threatened against or affecting any of the
officers, directors or employees of the Company and its Subsidiaries with
respect to their businesses or proposed business activities) at law or in
equity, or before or by any governmental department, commission, board, bureau,
agency or instrumentality (including, without
21
limitations, any actions, suit, proceedings or investigations with respect to
the transactions contemplated by this Agreement); neither the Company nor any
Subsidiary is subject to any arbitration proceedings under collective bargaining
agreements or otherwise or, to the best of the Company's knowledge, any
governmental investigations or inquiries (including inquiry as to the
qualification to hold or receive any license or permit); and, to the best of the
Company's knowledge, there is no basis for any of the foregoing. Neither the
Company nor any Subsidiary is subject to any judgment, order or decree of any
court or other governmental agency. Neither the Company nor any Subsidiary has
received any opinion or memorandum or legal advice from legal counsel to the
effect that it is exposed, from a legal standpoint, to any liability or
disadvantage which may be material to its business.
N. Brokers. There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
this Agreement based on any arrangement or agreement binding upon the Company or
any Subsidiary. The Company shall pay, and hold each Purchaser harmless
against, any liability, loss or expense (including, without limitation,
reasonable attorneys' fees and out-of-pocket expenses) arising in connection
with any such claim.
O. Governmental Consent, etc. No permit, consent, approval or
authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by the
Company of this Agreement or the other agreements contemplated hereby, or the
consummation by the Company of any other transactions contemplated hereby or
thereby, except as expressly contemplated herein or in the exhibits hereto.
P. Insurance. The attached "Insurance Schedule" contains a description
of each insurance policy maintained by the Company and its Subsidiaries with
respect to its properties, assets and businesses, and each such policy is in
full force and effect as of the Closing. Neither the Company nor any Subsidiary
is in default with respect to its obligations under any insurance policy
maintained by it. The insurance coverage of the Company and its Subsidiaries is
customary for corporations of similar size engaged in similar lines of business.
Q. Employees and ERISA.
(i) The Company is not aware that any executive or key employee of
the Company or any Subsidiary or any group of employees of the Company or any
Subsidiary has any plans to terminate employment with the Company or any
Subsidiary. The Company and each Subsidiary have complied in all material
respects with all laws relating to the employment of labor, including provisions
thereof relating to wages, hours, equal opportunity, collective bargaining and
the payment of social security and other taxes, and the Company is not aware
that it or any Subsidiary has any material labor relations problems (including
any union organization activities, threatened or actual strikes or work
stoppages or material grievances).
22
(ii) Neither the Company, its Subsidiaries nor, to the best of the
Company's knowledge after due inquiry, any of their employees is subject to any
noncompete, nondisclosure, confidentiality, employment, consulting or similar
agreements relating to, affecting or in conflict with the present or proposed
business activities of the Company and its Subsidiaries, except for agreements
between the Company and its present and former employees.
(iii) Neither the Company nor any Subsidiary presently maintains or
contributes to, or ever has maintained or contributed to, any "employee benefit
plan," as such term is defined in Section 3 of the Employee Retirement Income
Security act of 1974, as amended ("ERISA"), with respect to which the Company is
required to file Internal Revenue Service ("IRS") Form 5500, and neither the
Company nor any Subsidiary presently contributes to or ever has contributed
to any "multiemployer plan," as such term is defined in Section 3 of ERISA.
(iv) Attached as F is a copy of the Company's 1996 Stock Option
Plan, and forms of Notice of Exercise and Early Exercise Stock Purchase
Agreement (the "Stock Option Agreements"). The Stock Option Agreements contain
vesting provisions and give the Company a repurchase right and a right of first
refusal to purchase shares of an optionee's Common Stock on the terms set forth
therein. The repurchase right and right of first refusal can be assigned to the
Investors.
R. Compliance with Laws. Neither the Company nor any Subsidiary has
violated any law or any governmental regulation or requirement which violation
would reasonably be expected to have a material adverse effect upon the
financial condition, operating results, assets, operations or business prospects
of the Company and its Subsidiaries taken as a whole, and neither the Company
nor any Subsidiary has received notice of any such violation. Neither the
Company nor the Subsidiary is subject to any clean up liability, or has reason
to believe it may become subject to any clean up liability, under any federal,
state or local environmental law, rule or regulation.
S. Affiliated Transactions. Except as set forth on the attached
"Affiliated Transactions Schedule," no officer, director or stockholder of the
Company or any Subsidiary or any person related by blood or marriage to any such
person or any entity in which any such person owns any beneficial interest, is a
party to any agreement, contract, commitment or transaction with the Company or
any Subsidiary or has any material interest in any material property used by the
Company or any Subsidiary.
T. Disclosure. Neither this Agreement nor any of the schedules,
attachments, written statements, documents, certificates or other items prepared
or supplied to any Purchaser by or on behalf of the Company with respect to the
transactions contemplated hereby contain any untrue statement of a material fact
or omit a material fact necessary to make each statement contained herein or
therein not misleading.
23
U. Closing Date. The representations and warranties of the Company
contained in this Section 5 and elsewhere in this Agreement and all information
contained in any exhibit, schedule or attachment hereto or in any writing
delivered by, or on behalf of, the Company to any Purchaser shall be true and
correct in all material respects on the date of the Closing as though then made,
except as affected by the transactions expressly contemplated by this Agreement.
6. Definitions. For purposes of this Agreement, the following terms
-----------
have the meanings set forth below:
"Affiliate" of any particular person or entity means any other person or
---------
entity controlling, controlled by or under common control with such particular
person or entity.
"Indebtedness" means all indebtedness for borrowed money (including
------------
purchase money obligations) maturing one year or more from the date of creation
or incurrence thereof or renewable or extendible at the option of the debtor to
a date one year or more from the date of creation or incurrence thereof, all
indebtedness under revolving credit arrangements extending over a year or more,
all capitalized lease obligations and all guarantees of any of the foregoing.
"Investment" as applied to any Person means (i) any direct or indirect
----------
purchase or other acquisition by such Person of any notes, obligations,
instruments, stock, securities or ownership interest (including partnership
interests and joint venture interests) of any other Person and (ii) any capital
contribution by such Person to any other Person.
"Officer's Certificate" means a certificate signed by the Company's
---------------------
president or its chief financial officer, stating that (i) the officer signing
such certificate has made or has caused to be made such investigations as are
necessary in order to permit him to verify the accuracy of the information set
forth in such certificate and (ii) to the best of such officer's knowledge, such
certificate does not misstate any material fact and does not omit to state any
fact necessary to make the certificate not misleading.
"Person" means an individual, a partnership, a corporation, an association,
------
a joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political subdivision
thereof.
"Proprietary Rights" means all (i) patents, patent applications, patent
------------------
disclosures and inventions, (ii) trademarks, service marks, trade dress, trade
names and corporate names and registrations and applications for registration
thereof, (iii) copyrights and registrations and applications for registration
thereof, (iv) mask works and registrations and applications for registration
thereof, (v) computer software, data and documentation, (vi) trade secrets and
other confidential information (including, without limitation, ideas, formulas,
compositions, inventions (whether patentable or unpatentable and whether or not
reduced to practice), know-how, manufacturing and production processes and
techniques, research and development information, drawings, specifications,
24
designs, plans, proposals, technical data, copyrightable works, financial and
marketing plans and customer and supplier lists and information), (vii) other
intellectual property rights, and (viii) copies and tangible embodiments thereof
(in whatever form or medium).
"Restricted Securities" means (i) the Preferred Stock issued hereunder,
---------------------
(ii) the Common Stock issued upon conversion of Preferred Stock and (iii) any
securities issued with respect to the securities referred to in clauses (i),
(ii) or (iii) above by way of a stock dividend or stock split or in connection
with a combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Restricted Securities, such securities
shall cease to be Restricted Securities when they have (a) been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, (b) become eligible for sale pursuant to
Rule 144(k) (or any similar provision then in force) under the Securities Act or
(c) been otherwise transferred and new certificates for them not bearing the
Securities Act legend set forth in paragraph 7.C. have been delivered by the
Company in accordance with paragraph 4.(ii). Whenever any particular securities
cease to be Restricted Securities, the holder thereof shall be entitled to like
tenor not bearing a Securities Act legend of the character set forth in
paragraph 7.C.
"Securities Act" means the Securities Act of 1933, as amended, or any
--------------
similar federal law then in force.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
-----------------------
amended, or any similar federal law the in force.
"Securities and Exchange Commission" includes any governmental body or
----------------------------------
agency succeeding to the functions thereof.
"Subsidiary" means, with respect to any Person, any corporation,
----------
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a partnership, association or other business entity if
such Person or Persons shall be allocated a majority of partnership, association
or other business entity gains or losses or shall be or control the managing
director or general partner of such partnership, association or other business
entity.
"Underlying Common Stock" means (i) the Common Stock issued or issuable
-----------------------
upon conversion of the Preferred Stock and (ii) any Common Stock issued or
issuable
25
with respect to the securities referred to in clause (i) above by way
of stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. For purposes
of this Agreement, any Person who holds Preferred Stock shall be deemed to be
the holder of the Underlying Common Stock obtainable upon conversion of the
Preferred Stock in connection with the transfer thereof or otherwise regardless
of any restriction or limitation on the conversion of the Preferred Stock. As
to any particular shares of Underlying Common Stock, such shares shall cease to
be Underlying Common Stock when they have been (a) effectively registered under
the Securities Act and disposed of in accordance with the registration statement
covering them or (b) distributed to the public through a broker, dealer or
market maker pursuant to Rule 144 under the Securities Act (or any similar
provision then in force).
7. Miscellaneous.
-------------
A. Expenses. The Company agrees to pay, and hold each Purchaser and
all holders of Preferred Stock and Underlying Common Stock harmless against
liability for the payment of, (i) the fees (not to exceed $20,000, provided that
no material unforeseen issues or conditions arise) and expenses of Holland &
Xxxx, special counsel to the Investors, arising in connection with the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated by this Agreement which shall be payable at the
Closing, (ii) the reasonable fees and expenses incurred with respect to any
amendments or waivers (whether or not the same become effective) under or in
respect of this Agreement, the agreements contemplated hereby or the Certificate
of Incorporation (including, without limitation, in connection with any proposed
merger, sale or recapitalization of the Company), (iii) stamp and other taxes
which may be payable in respect of the execution and delivery of this Agreement
or the issuance, delivery or acquisition of any shares of Preferred Stock or any
shares of Common Stock issuable upon conversion of Preferred Stock, (iv) the
enforcement of the rights granted under this Agreement, the agreements
contemplated hereby and the Certificate of Incorporation, and (v) the reasonable
fees and expenses incurred at the request of the Company by each such Person in
any filing with any governmental agency with respect to its investment in the
Company or in any other filing with any governmental agency with respect to the
Company which mentions such Person.
B. Remedies.
(i) Each holder of Preferred Stock and Underlying Common Stock shall
have all rights and remedies set forth in this Agreement and the Certificate of
Incorporation and all rights and remedies which such holders have been granted
at any time under any other agreement or contract and all of the rights which
such holders have under any law. Any Person having any rights under any
provision of this Agreement shall be entitled to enforce such rights
specifically (without posting a bond or other security), to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights granted by law.
26
(ii) The Company agrees to indemnify and hold the Purchaser harmless
against any loss, liability, damage or expense (including reasonable legal fees
and costs) which such Purchasers may suffer, sustain or become subject to as a
result of or in connection with the breach by the Company of any representation,
warranty, covenant or agreement of the Company contained in this Agreement, the
Certificate of Incorporation or the other agreements contemplated hereby.
C. Purchaser's Investment Representations. Each Purchaser, as to
itself only, hereby represents that:
(i) it is an "accredited investor" as defined in Regulation D
promulgated under the Securities Act;
(ii) it is acquiring the Restricted Securities purchased hereunder
or acquired pursuant hereto for its own account with the present intention of
holding such securities for purposes of investment, and that it has no intention
of selling such securities in a public distribution in violation of the federal
securities laws or any applicable state securities laws; provided that nothing
contained herein shall prevent any Purchaser and subsequent holders of
Restricted Securities from transferring such securities in compliance with the
provisions of Section 4 hereof. Each certificate for Restricted Securities shall
be imprinted with a legend in substantially the following form:
"The securities represented by this certificate were originally issued
on _____________, and have not been registered under the Securities
Act of 1933, as amended. The transfer of the securities represented
to the conditions specified in the Purchase Agreement, dated as of
_____________, between the issuer (the "Company") and certain
investors, and the Company reserves the right to refuse the transfer
of such securities until such conditions have been fulfilled with
respect to such transfer. A copy of such conditions shall be
furnished by the Company to the holder hereof upon written request and
without charge."
(iii) it understands that it must bear the economic risk of the
investment in the Restricted Securities for an indefinite period of time because
the Restricted Securities have not been registered under the Securities Act and
applicable state securities laws and therefore cannot be sold unless they are
subsequently registered under the Securities Act and applicable state securities
laws or an exemption from such registration is available; and
(iv) the execution, delivery and performance by such Purchaser of
this Agreement and all other agreements to which such Purchaser is a party have
been duly authorized by such Purchaser and each constitutes a valid and binding
obligation of such Purchaser, enforceable in accordance with its terms.
27
D. Treatment of the Preferred Stock. The Company covenants and agrees
that so long as federal income tax laws prohibit a deduction for distributions
made by the Company with respect to preferred stock (i) it shall treat all
distributions paid by it on the Preferred Stock as non-deductible dividends on
all of its tax returns and (ii) it shall treat the Preferred Stock as preferred
stock in all of its financial statements and other reports and shall treat all
distributions paid by it on the Preferred Stock as dividends on preferred stock
in such statements and reports.
E. Consent to Amendments. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
holders of a majority of the outstanding Preferred Stock; provided that if there
is no Preferred Stock outstanding, the provisions of this Agreement may be
amended and the Company may take any action herein prohibited, only if the
Company has obtained the written consent of the holders of a majority of the
Underlying Common Stock. No other course of dealing between the Company and the
holder of any Preferred Stock or Underlying Common Stock or any delay in
exercising any rights hereunder or under the Certificate of Incorporation shall
operate as a waiver of any rights of any such holders. For purposes of this
Agreement, shares of Preferred Stock, or Underlying Common Stock held by the
Company or any Subsidiaries shall not be deemed to be outstanding. If the
Company pays any consideration to any holder of Preferred Stock or Underlying
Common Stock for such holder's consent to any amendment, modification or waiver
hereunder, the Company shall also pay each other holder of Preferred Stock or
Underlying Common Stock granting its consent hereunder equivalent consideration
computed on a pro rata basis.
F. Survival of Representations and Warranties. All representations
and warranties contained herein or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, regardless of any
investigation made by any Purchaser or on its behalf.
G. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not. In addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for any Purchaser's benefit as a
purchaser or holder of Preferred Stock or Underlying Common Stock are also for
the benefit of, and enforceable by, any subsequent holder of such Preferred
Stock or such Underlying Common Stock.
H. Capital and Surplus; Special Reserves. The Company agrees that the
capital of the Company (as such term is used in Section 154 of the General
Corporation Law of Delaware) in respect of the Preferred Stock issued pursuant
to this Agreement shall be equal to the aggregate par value of such shares and
that it shall not
28
increase the capital of the Company with respect to any shares of the Company's
capital stock at any time on or after the date of this Agreement. The Company
also agrees that it shall not create any special reserves under Section 171 of
the General Corporation Law of Delaware without the prior written consent of the
holders of a majority of the outstanding Preferred Stock.
I. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
J. Counterparts. This Agreement may be executed simultaneously in two
or more counterparts, any one of which need not contain the signatures of more
than one party, but all such counterparts taken together shall constitute one
and the same Agreement.
K. Descriptive Headings; Interpretation. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a Section
of this Agreement. The use of the word "including" in this Agreement shall be
by way of example rather than by limitation.
L. Governing Law. The corporate laws of Delaware shall govern all
issues concerning the relative rights of the Company and its stockholders. All
other questions concerning the construction, validity and interpretation of this
Agreement and the exhibits and schedules hereto shall be governed by the
internal law, and not the law of conflicts, of Colorado.
M. Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, sent to the recipient by reputable express courier service (charges
prepaid) or mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to each Purchaser at the address indicated on the
Schedule of Purchasers and to the Company at the address listed below:
Centennial Communications Corp.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: President
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
29
N. Understanding Among the Purchasers . The determination of each
Purchaser to purchase the Preferred Stock pursuant to this Agreement has been
made by such Purchaser independent of any other Purchaser and independent of any
statements or opinions as to the advisability of such purchase or as to the
properties, business, prospects or condition (financial or otherwise) of the
Company and its Subsidiaries which may have been made or given by any other
Purchaser or by any agent or employee of any other Purchaser. In addition, it
is acknowledged by each of the other Purchasers that Centennial has not acted as
an agent of such Purchaser in connection with making its investment hereunder
and that Centennial shall not be acting as an agent of such Purchaser in
connection with monitoring its investment hereunder.
* * * * *
30
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first written above.
CENTENNIAL COMMUNICATIONS CORP.
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Title:________________________________
CENTENNIAL FUND IV, L.P. TELECOM PARTNERS, L.P.
By: Centennial Holdings, IV, L.P. By: /s/ Xxxxxxx X. Xxxxxxx
Its: General Partner -----------------------------------
Title: Managing Member of the General
Partner
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Title: General Partner
TRAILHEAD VENTURES, L.P. BOULDER VENTURES, L.P.
By: Wind River Partners By: /s/ Xxxx Xxxxxxx
-----------------------------------
Title: Partner
--------------------------------
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Title: General Partner
GC&H INVESTMENTS
By: /s/ Xxxx X. Xxxxxxx /s/ Xxxx Xxxxxx
----------------------------------- --------------------------------------
Title: Xxxx Xxxxxx
/s/ Xxxxxx XxXxxxxx
-------------------------------------- --------------------------------------
Xxxxxx XxXxxxxx Xxxx Xxxxxx
/s/ Xxxx X. Xxxxxx
--------------------------------------
Xxxx X. Xxxxxx
CENTENNIAL HOLDINGS, INC.
By /s/ Xxxxxx X. XxXxxxxxxx
------------------------------------
Name: Xxxxxx X. XxXxxxxxxx
Title: Vice President, Legal Admin.
MGVF II, Ltd.
By: [illegible signature]
-----------------------------------
General Partner
31
SCHEDULE OF PURCHASERS
Name and Address No. Of Shares of Total Purchase Price
Preferred Stock for Preferred Stock
-------------------------------------------------------------------------------------------
Telecom Partners, L.P. 30 $ 750,000
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Centennial Fund IV, L.P. 175 4,375,000
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Centennial Holdings, Inc. 14 350,000
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Xxxx X. Xxxxxx 4 100,000
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Xxxxxx XxXxxxxx 2 50,000
00 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Xxxxxxx Xxxxxx 4 100,000
00 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Trailhead Ventures, L.P. 80 2,000,000
000 00xx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
MGVF II, Ltd. 20 500,000
0000 Xxxxx Xx., Xxxxx 0000
Xxxxxxx, XX 00000
Boulder Ventures 00 000,000
Xxxxx 000
0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Schedule of Purchasers
Page 1
Name and Address No. Of Shares of Total Purchase Price
Preferred Stock for Preferred Stock
-------------------------------------------------------------------------------------------
GC&H Investments 2 50,000
Xxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
TOTAL: 345 $8,625,000
--- ----------
Schedule of Purchasers
Page 2
LIST OF EXHIBITS
Exhibit A Certificate of Incorporation
Exhibit B Registration Agreement
Exhibit C Stockholders Agreement
Exhibit D Initial Stockholder Agreement
Exhibit E Opinion of Counsel
Exhibit F Stock Option Agreements
List of Exhibits
Page 0
XXXXXXXXX XX XXX Xxx Xxxxxxxxx, XX
415 693-2000
0000 Xxxxxx Xxxxxxxxx Xxxx Xxxx, XX
Suite 250 415 843-5000
Xxxxxxx, XX
00000-0000 Menlo Park, CA
MAIN: 303 546-4000 415 843-5000
FAX: 000 000-0000
San Diego, CA
000 000-0000
Denver, CO
000 000-0000
WEB xxxx://xxx.xxxxxx.xxx
XXXXX C. T. LINFIELD
Direct: (000) 000-0000
Internet: xxxxxxxxxxx@xxxxxx.xxx
July 3, 1996
To the Purchasers
of Series A Preferred Stock
of Centennial Communications Corp.
listed on Schedule A hereto
Ladies and Gentlemen:
We have acted as counsel for Centennial Communications Corp., a Delaware
corporation (the "Company"), in connection with the issuance and sale of 82
shares of the Company's Series A Preferred Stock (the "Shares") to you under the
Series A Preferred Stock Purchase Agreement dated as of June 27, 1996 (the
"Agreement"). We are rendering this opinion pursuant to Section 2.I of the
Agreement. Except as otherwise defined herein, capitalized terms used but not
defined herein have the respective meanings given to them in the Agreement.
In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters (but not legal conclusions)
contained in and made pursuant to the Agreement, the Registration Agreement and
the Stockholders Agreement by and among the various parties, and originals or
copies certified to our satisfaction, of such records, documents, certificates,
opinions, memoranda and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. Where we render
an opinion "to the best of our knowledge" or concerning an item "known to us" or
our opinion otherwise refers to our knowledge, it is based solely upon (i) an
inquiry of attorneys within this firm who perform legal services for the
Company, (ii) receipt of a certificate executed by an officer of the Company
covering such matters, and (iii) such other investigation, if any, that we
specifically set forth herein.
In rendering this opinion, we have assumed: the genuineness and authenticity of
all signatures on original documents; the authenticity of all documents
submitted to us as originals; the conformity to originals of all documents
submitted to us as copies; the accuracy, completeness and authenticity of
certificates of public officials; and the due authorization, execution and
delivery of all documents (except the due authorization, execution and delivery
by the Company of the Agreement, the Registration Agreement and the Stockholders
Agreement), where authorization, execution and delivery are prerequisites to the
effectiveness of such documents. We have also assumed: that all individuals
executing and delivering documents had the legal capacity to so execute and
To the Purchasers of Series A Preferred
July 3, 1996
Page Two
deliver; that you have received all documents you were to receive under the
Agreement; that the Agreement, the Registration Agreement and the Stockholders
Agreement are obligations binding upon you; and that there are no extrinsic
agreements or understandings among the parties to the Agreement, the
Registration Agreement and the Stockholders Agreement that would modify or
interpret the terms of the Agreement, the Registration Agreement or the
Stockholders Agreement or the respective rights or obligations of the parties
thereunder.
Our opinion is expressed only with respect to the federal laws of the United
States of America, the laws of the State of Colorado and the General Corporation
Law of the State of Delaware. We express no opinion as to whether the laws of
any particular jurisdiction apply, and no opinion to the extent that the laws of
any jurisdiction other than those identified above are applicable to the subject
matter hereof. We are not rendering any opinion as to compliance with any
antifraud law, rule or regulation relating to securities, or to the sale or
issuance thereof.
With regard to our opinion in paragraph 5 below, we have examined and relied
upon a certificate executed by an officer of the Company, to the effect that the
consideration for all outstanding shares of capital stock of the Company was
received by the Company in accordance with the provisions of the applicable
Board of Directors resolutions and any plan or agreement relating to the
issuance of such shares, and we have undertaken no independent verification with
respect thereto.
With regard to our opinion in paragraph 6 below with respect to material
defaults under any material agreement known to us, we have relied solely upon
(i) inquiries of officers of the Company, (ii) a list supplied to us by the
Company of material agreements to which the Company is a party, or by which it
is bound, and (iii) an examination of the items on the aforementioned list; we
have made no further investigation.
On the basis of the foregoing, in reliance thereon and with the foregoing
qualifications, we are of the opinion that:
1. The Company has been duly incorporated and is a validly existing corporation
in good standing under the laws of the State of Delaware.
2. The Company has the requisite corporate power to own its property and assets
and to conduct its business, is qualified to do business in the State of
Colorado, and to the best of our knowledge, is not required to qualify as a
foreign corporation to do business in any other jurisdiction in the United
States.
To the Purchasers of Series A Preferred
July 3, 1996
Page Three
3. The Agreement, the Registration Agreement and the Stockholders Agreement
have been duly and validly authorized, executed and delivered by the Company and
constitute valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, except as rights to indemnity under
Section 6 of the Registration Agreement may be limited by applicable laws and
public policy and except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, arrangement, moratorium or other similar laws
affecting creditors' rights, and subject to general equity principles and to
limitations on availability of equitable relief, including specific performance.
4. The Restated Certificate of Incorporation (the "Restated Certificate") has
been duly and validly authorized, executed and filed with the Delaware Secretary
of State and does not violate or conflict with the provisions of the General
Corporation Law of the State of Delaware.
5. The Company's authorized capital stock consists of (a) one thousand one
hundred and fifty (1,150) shares of Common Stock, of which three hundred fifty
(350) shares are issued and outstanding and (b) one thousand (1,000) shares of
Preferred Stock, all of which shares have been designated Series A Preferred
Stock, two hundred sixty-three (263) of which were issued and outstanding prior
to the Closing. All issued and outstanding shares of the Company's Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable. The rights, preferences and privileges of the Series A Preferred
Stock are as stated in the Restated Certificate. The Shares have been duly
authorized, and upon issuance and delivery against payment therefor in
accordance with the terms of the Agreement, the Shares will be validly issued,
outstanding, fully paid and nonassessable. The shares of Common Stock issuable
upon conversion of the Shares have been duly authorized and reserved for
issuance, and upon conversion of the Shares in accordance with the Restated
Certificate, will be validly issued, outstanding, fully paid and nonassessable.
To the best of our knowledge, except as disclosed in the Agreement or the
Disclosure Schedules thereto, there are no options, warrants, conversion
privileges, preemptive rights or other rights presently outstanding to purchase
any of the authorized but unissued capital stock of the Company, other than (i)
the conversion privileges of the Series A Preferred Stock and (ii) rights
created in connection with the transactions contemplated by the Agreement, the
Registration Agreement and the Stockholders Agreement.
To the Purchasers of Series A Preferred
July 3, 1996
Page Four
6. The execution and delivery of the Agreement, the Registration Agreement and
the Stockholders Agreement by the Company and the offer and sale of the Shares
pursuant thereto do not violate any provision of the Company's Restated
Certificate or Bylaws, and do not constitute a material default under the
provisions of any material agreement known to us to which the Company is a party
or by which it is bound, and do not violate or contravene (a) any governmental
statute, rule or regulation applicable to the Company or (b) any order, writ,
judgment, injunction, decree, determination or award which has been entered
against the Company and of which we are aware, the default, violation or
contravention of which would materially and adversely affect the Company, its
assets, financial condition or operations.
7. To the best of our knowledge, there is no action, proceeding or
investigation pending or overtly threatened against the Company before any court
or administrative agency that questions the validity of the Agreement, the
Registration Agreement and the Stockholders Agreement or might result, either
individually or in the aggregate, in any material adverse change in the assets,
financial condition, or operations of the Company.
8. All consents, approvals, authorizations, or orders of, and filings,
registrations, and qualifications with, any regulatory authority or governmental
body in the United States required for the consummation by the Company of the
transactions contemplated by the Agreement, have been made or obtained.
9. Based in part upon the representations of the Purchasers contained in the
Agreement, the offer and sale of the Shares is exempt from the registration
requirements of the Securities Act of 1933 and the qualification or registration
requirements of the Colorado Securities Act, each as amended to date.
To the Purchasers of Series A Preferred
July 3, 1996
Page Five
This opinion is intended solely for your benefit and is not to be made available
to or be relied upon by any other person, firm, or entity without our prior
written consent.
Very truly yours,
XXXXXX GODWARD XXXXXX
XXXXXXXXX & XXXXX
By _________________________
Xxxxx C.T. Linfield
[LETTERHEAD OF XXXXX C. T. LINFIELD APPEARS HERE]
June 27, 1996
To the Purchasers
of Series A Preferred Stock
of Centennial Communications Corp.
listed on Schedule A hereto
Ladies and Gentlemen:
We have acted as counsel for Centennial Communications Corp., a Delaware
corporation (the "Company"), in connection with the issuance and sale of 263
shares of the Company's Series A Preferred Stock (the "Shares") to you under the
Series A Preferred Stock Purchase Agreement dated as of June 27, 1996 (the
"Agreement"). We are rendering this opinion pursuant to Section 2.I of the
Agreement. Except as otherwise defined herein, capitalized terms used but not
defined herein have the respective meanings given to them in the Agreement.
In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters (but not legal conclusions)
contained in and made pursuant to the Agreement, the Registration Agreement and
the Stockholders Agreement by and among the various parties, and originals or
copies certified to our satisfaction, of such records, documents, certificates,
opinions, memoranda and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. Where we render
an opinion "to the best of our knowledge" or concerning an item "known to us" or
our opinion otherwise refers to our knowledge, it is based solely upon (i) an
inquiry of attorneys within this firm who perform legal services for the
Company, (ii) receipt of a certificate executed by an officer of the Company
covering such matters, and (iii) such other investigation, if any, that we
specifically set forth herein.
In rendering this opinion, we have assumed: the genuineness and authenticity of
all signatures on original documents; the authenticity of all documents
submitted to us as originals; the conformity to originals of all documents
submitted to us as copies; the accuracy, completeness and authenticity of
certificates of public officials; and the due authorization, execution and
delivery of all documents (except the due authorization, execution and delivery
by the Company of the Agreement, the Registration Agreement and the Stockholders
Agreement), where authorization, execution and delivery are prerequisites to the
effectiveness of such documents. We have also assumed: that all individuals
executing and delivering documents had the legal capacity to so execute and
deliver; that you have received all documents you were to receive under the
Agreement;
To the Purchasers of Series A Preferred
June 27, 1996
Page Two
that the Agreement, the Registration Agreement and the Stockholders
Agreement are obligations binding upon you; and that there are no extrinsic
agreements or understandings among the parties to the Agreement, the
Registration Agreement and the Stockholders Agreement that would modify or
interpret the terms of the Agreement, the Registration Agreement or the
Stockholders Agreement or the respective rights or obligations of the parties
thereunder.
Our opinion is expressed only with respect to the federal laws of the United
States of America, the laws of the State of Colorado, the General Corporation
Law of the State of Delaware and the securities laws of the State of California
and the State of Texas. We express no opinion as to whether the laws of any
particular jurisdiction apply, and no opinion to the extent that the laws of any
jurisdiction other than those identified above are applicable to the subject
matter hereof. With respect to securities laws of the State of California and
the State of Texas, we have based our opinion solely upon our examination of
such laws and the rules and regulations of the authorities administering such
laws, all as reported in unofficial compilations. Neither a special ruling of
such authority nor an opinion of counsel in such jurisdiction has been obtained.
We are not rendering any opinion as to compliance with any antifraud law, rule
or regulation relating to securities, or to the sale or issuance thereof.
With regard to our opinion in paragraph 5 below, we have examined and relied
upon a certificate executed by an officer of the Company, to the effect that the
consideration for all outstanding shares of capital stock of the Company was
received by the Company in accordance with the provisions of the applicable
Board of Directors resolutions and any plan or agreement relating to the
issuance of such shares, and we have undertaken no independent verification with
respect thereto.
With regard to our opinion in paragraph 6 below with respect to material
defaults under any material agreement known to us, we have relied solely upon
(i) inquiries of officers of the Company, (ii) a list supplied to us by the
Company of material agreements to which the Company is a party, or by which it
is bound, and (iii) an examination of the items on the aforementioned list; we
have made no further investigation.
On the basis of the foregoing, in reliance thereon and with the foregoing
qualifications, we are of the opinion that:
1. The Company has been duly incorporated and is a validly existing corporation
in good standing under the laws of the State of Delaware.
To the Purchasers of Series A Preferred
June 27, 1996
Page Three
2. The Company has the requisite corporate power to own its property and assets
and to conduct its business, is qualified to do business in the State of
Colorado, and to the best of our knowledge, is not required to qualify as a
foreign corporation to do business in any other jurisdiction in the United
States.
3. The Agreement, the Registration Agreement and the Stockholders Agreement
have been duly and validly authorized, executed and delivered by the Company and
constitute valid and binding obligations of the Company enforceable against the
Company in accordance with their terms, except as rights to indemnity under
Section 6 of the Registration Agreement may be limited by applicable laws and
public policy and except as enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, arrangement, moratorium or other similar laws
affecting creditors' rights, and subject to general equity principles and to
limitations on availability of equitable relief, including specific performance.
4. The Restated Certificate of Incorporation (the "Restated Certificate") has
been duly and validly authorized, executed and filed with the Delaware Secretary
of State and does not violate or conflict with the provisions of the General
Corporation Law of the State of Delaware.
5. The Company's authorized capital stock consists of (a) one thousand one
hundred and fifty (1,150) shares of Common Stock, of which three hundred fifty
(350) shares are issued and outstanding and (b) one thousand (1,000) shares of
Preferred Stock, all of which shares have been designated Series A Preferred
Stock, none of which were issued and outstanding prior to the Closing. All
issued and outstanding shares of the Company's Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable. The rights,
preferences and privileges of the Series A Preferred Stock are as stated in the
Restated Certificate. The Shares have been duly authorized, and upon issuance
and delivery against payment therefor in accordance with the terms of the
Agreement, the Shares will be validly issued, outstanding, fully paid and
nonassessable. The shares of Common Stock issuable upon conversion of the
Shares have been duly authorized and reserved for issuance, and upon conversion
of the Shares in accordance with the Restated Certificate, will be validly
issued, outstanding, fully paid and nonassessable. To the best of our
knowledge, except as disclosed in the Agreement or the Disclosure Schedules
thereto, there are no options, warrants, conversion privileges, preemptive
rights or other rights presently outstanding to purchase any of the authorized
but unissued capital stock of the Company, other than (i) the conversion
privileges of the
To the Purchasers of Series A Preferred
June 27, 1996
Page Four
Series A Preferred Stock and (ii) rights created in connection with the
transactions contemplated by the Agreement, the Registration Agreement and the
Stockholders Agreement.
6. The execution and delivery of the Agreement, the Registration Agreement and
the Stockholders Agreement by the Company and the offer and sale of the Shares
pursuant thereto do not violate any provision of the Company's Restated
Certificate or Bylaws, and do not constitute a material default under the
provisions of any material agreement known to us to which the Company is a party
or by which it is bound, and do not violate or contravene (a) any governmental
statute, rule or regulation applicable to the Company or (b) any order, writ,
judgment, injunction, decree, determination or award which has been entered
against the Company and of which we are aware, the default, violation or
contravention of which would materially and adversely affect the Company, its
assets, financial condition or operations.
7. To the best of our knowledge, there is no action, proceeding or
investigation pending or overtly threatened against the Company before any court
or administrative agency that questions the validity of the Agreement, the
Registration Agreement and the Stockholders Agreement or might result, either
individually or in the aggregate, in any material adverse change in the assets,
financial condition, or operations of the Company.
8. All consents, approvals, authorizations, or orders of, and filings,
registrations, and qualifications with, any regulatory authority or governmental
body in the United States required for the consummation by the Company of the
transactions contemplated by the Agreement, have been made or obtained, except
for the filing of a Notice of Transaction pursuant to Section 25102(f) of the
California Corporate Securities Law of 1968.
9. Based in part upon the representations of the Purchasers contained in the
Agreement, the offer and sale of the Shares is exempt from the registration
requirements of the Securities Act of 1933 and the qualification or registration
requirements (as the case may be) of the Colorado Securities Act, the Texas
Securities Act of 1957 and the California Corporate Securities Law of 1968, each
as amended to date.
To the Purchasers of Series A Preferred
June 27, 1996
Page Five
This opinion is intended solely for your benefit and is not to be made available
to or be relied upon by any other person, firm, or entity without our prior
written consent.
Very truly yours,
XXXXXX GODWARD XXXXXX
XXXXXXXXX & XXXXX
By _________________________
Xxxxx C.T. Linfield
LIST OF DISCLOSURE SCHEDULES
Capitalization Schedule
Subsidiary Schedule
Restrictions Schedule
Financial Statements Schedule
Liabilities Schedule
Adverse Change Schedule
Developments Schedule
Assets Schedule
Taxes Schedule
Contracts Schedule
Proprietary Rights Schedule
Litigation Schedule
Brokerage Schedule
Consents Schedule
Insurance Schedule
Employees Schedule
Compliance Schedule
Affiliated Transactions Schedule
List of Disclosure Schedules
Page 1
CAPITALIZATION SCHEDULE
TO PURCHASE AGREEMENT
OPTION HOLDERS* NUMBER OF SHARES EXERCISE PRICE PER SHARE EXPIRATION DATE
--------------------------------------------------------------------------------------------------
XXXX XXXXXX 10.00 $10,000 01/11/06
XXXXXX XXXXXXXX 2.00 $10,000 01/11/06
XXXX XXXXXXXX 3.00 $10,000 03/14/06
XXXX XXXX 2.50 $10,000 03/14/06
XXXXXX XXXXXXX 2.50 $10,000 05/09/06
XXXX XXXXXXXX 2.00 $10,000 05/09/06
XXXXXX XXXXX S. 1.50 $10,000 05/09/06
HUMAN RESOURCE SOLUTION .25 $25,000 06/06/06
------------------
TOTAL
23.75
==================
* ALL HOLDERS ARE SUBJECT TO STOCK OPTION AGREEMENTS.
SUBSIDIARY SCHEDULE
TO PURCHASE AGREEMENT
SUBSIDIARY JURISDICTION STOCKHOLDERS
------------------------------------------------------------------------------------------------
MOBILE LINE PERU, S.A. PERU CENTENNIAL COMMUNICATIONS
CORP. - 51%
XXXXX XXXXXXXX PRESA - 49%
RESTRICTIONS SCHEDULE
TO PURCHASE AGREEMENT
NONE.
FINANCIAL STATEMENTS SCHEDULE
TO PURCHASE AGREEMENT
1. Unaudited balance sheet of Centennial Communications Corp. (the "Company")
for the period ended December 31, 1995
2. Unaudited balance sheet of the Company for the period ended May 31, 1996
3. Tax Return of Mobil Line Peru, S.A. ("Mobil Line") for the period ended
December 31, 1995
4 Unaudited balance sheet of Mobil Line for the period ended May 31, 1996
5. Unaudited consolidated balance sheet of the Company and Mobil Line for the
period ended May 31, 1996
LIABILITIES SCHEDULE
TO PURCHASE AGREEMENT
1. The Company has agreed to pay the balance of the down payment of
approximately $275,000 due to X.X. Xxxxxxx by June 28, 1996, pursuant to a
capital leasing agreement. $450,000 of the $725,000 down payment has
already been paid by the Company.
2. The Company entered into a letter of intent with Xxxxx Xxxxxxxx Presa to
pay $600,000 for all of his shares of Common Stock of Mobil Line Peru S.A.
which amound would be due upon closing of that certain purchase agreement.
(This transaction is still being negotiated.)
3. The Company is obligated to pay one-half (1/2) of its down payment of
approximately $250,000 to the FCC (customarily 5% of the aggregate net high
winning bid amount) for the 900 MHz SMR MTA licenses which amount could be
due by the first week of August, 1996.
4. Pursuant to a Purchase Order dated March 14, 1996, the Company has agreed
to pay approximately $2,490,000 to Maxon America Inc. for the purchase of
equipment from August 1996 through December 1996.
ADVERSE CHANGE SCHEDULE
TO PURCHASE AGREEMENT
NONE.
DEVELOPMENT SCHEDULE
TO PURCHASE AGREEMENT
1. The Company paid $450,000 as a partial down payment to X.X. Xxxxxxx to
lease and acquire infrastructure equipment pursuant to a certain capital
leasing agreement for a total purchase price of $2,400,000, in which X.X.
Xxxxxxx will hold a security interest in these assets as to the unpaid
purchase price.
ASSETS SCHEDULE
TO PURCHASE AGREEMENT
NONE.
TAXES SCHEDULE
TO PURCHASE AGREEMENT
1. The Company has filed an extension for its 1995 Federal tax return and has
until September 15, 1996 in which to file said return. However, the
Company does not anticipate any tax liability.
CONTRACT SCHEDULE TO
PURCHASE AGREEMENT
EMPLOYEE BENEFITS:
1. 1996 Stock Option Plan, attached as Attachment F to the Employee Schedule to
this Purchase Agreement.
2. Employers Health Insurance Indemnity, PPO, EPO Basic and Standard Health
Benefit Plan for Colorado.
EMPLOYEE COMPENSATION:
1. Xxxx X. Xxxxxx, President
2. Xxxx X. Xxxx, Vice President of Finance
3. Xxxxxx Xxxxxxx, Director of Sales and Marketing
LEASES:
1. Lease, dated May 2, 1996, by and between Sixteen Hundred Wynkoop, Ltd. and
the Company, for lease space located at 0000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxx.
2. Lease Agreement, dated May 4, 1996, by and between The Banco Continental and
Mobile Line Peru, S.A. for lease space located at Xx. Xxxxxxxxx xx Xxxxxx
Xx. 0000, 00xx Xxxxx, Xxx Xxxxxx, Xxxx.
3. Lease arrangement with Hialeah in Lima, Peru, for rental space on Morro
Solar for $900 per month. No document is available at this time which
memorializes this arrangement.
PURCHASE AGREEMENTS OF COMPANY SECURITIES:
1. Stock Subscription Agreement, dated October 26, 1995, by and between the
Company and Centennial Rural Wireless, Inc.
2. Stock Subscription Agreement, dated October 26, 1995, by and between the
Company and Telecom Partners, L.P.
3. Purchase Agreement, dated December 8, 1995, by and between the Company and
the Purchasers (Telecom, Centennial Holdings and Centennial Funds)
4. Registration Rights Agreement, dated December 8, 1995, by and among the
Company and the Purchasers named therein
5. Stockholders Agreement, dated December 8, 1995, by and among the Company and
the Stockholders named therein
6. First Amendment to Purchase Agreement, dated January 31, 1996, by and among
the Company and Xxxx Xxxxxx and Xxxxxx XxXxxxxx, as Purchasers
7. Second Amendment to Purchase Agreement, dated February 1, 1996, by and among
the Company and Xxxx Xxxxxx, as Purchaser
8. Purchase Agreement, dated December 15, 1995, by and among Mobil Line Peru
S.A., the Company and Xxxxx Xxxxxxxx Presa
9. First Amendment to Purchase Agreement, dated February 28, 1996, by and among
Mobil Line Peru S.A., the Company and Xxxxx Xxxxxxxx Presa
10. Second Amendment to Purchase Agreement, dated February 28, 1996, by and
among Mobil Line Peru S.A., the Company and Xxxxx Xxxxxxxx Presa
11. Letter Agreement to Purchase Agreement, dated February 29, 1996, by and
among Mobil Line Peru S.A., the Company and Xxxxx Xxxxxxxx Presa
12. Shareholders Agreement, dated February 29, 1996, by and among the Company,
Xxxxx Xxxxxxxx Presa and Mobil Line Peru S.A.
MATERIAL AGREEMENTS (IN EXCESS OF $150,000):
1. Agreement, dated May 2, 1996, by and between the Company and SBA, Inc.
2. Services Agreement, by and between the Company and X.X. Xxxxxxx, together
with letters dated April 1, 1996 and June 14, 1996, and a confirmation of
order
3. Purchase Order, dated March 14, 1996, between the Company and Maxon America
Inc.
LETTERS OF INTENT (IN EXCESS OF $150,000):
1. Letter of Intent, dated June 21, 1996, as to the sale of stock of Mobil Line
Peru, S.A. from Xxxxx Xxxxxxxx to the Company
2. Letter of Intent, dated June 11, 1996, as to the sale of all of the
outstanding capital stock of Sisterna Troncalizado S.A. from the
stockholders to the Company
PROPRIETARY RIGHTS SCHEDULE
TO PURCHASE AGREEMENT
1. The Board of Directors of the Company has approved the process to begin the
registration of the trademark "SMR Direct."
2. Mobile Line Peru, S.A. has approved the trademark name of "Mobile TRUNKING"
for registration but the process of registration has not yet begun.
3. The FCC is currently processing the Company's applications for forty-three
(43) MHz spectrum MTA licenses for issuance to the Company.
LITIGATION SCHEDULE
TO PURCHASE AGREEMENT
NONE.
BROKERAGE SCHEDULE
TO PURCHASE AGREEMENT
NONE.
CONSENTS SCHEDULE
TO PURCHASE AGREEMENT
NONE.
INSURANCE SCHEDULE
TO PURCHASE AGREEMENT
INSURANCE COMPANY COVERAGE*
------------------------------------------------------------------------------------
ASSOCIATED INDEMNITY CORP. COMMERCIAL GENERAL LIABILITY
ASSOCIATED INDEMNITY CORP. SIMPLIFIED COMMERCIAL PROPERTY
ASSOCIATED INDEMNITY CORP. HIRED/BORROWED AUTO
NATIONAL SURETY CORPORATION WORKERS COMPENSATION
FIREMAN'S FUND INSURANCE COMPANY COMMERCIAL UMBRELLA
GREAT NORTHERN INSURANCE COMPANY FOREIGN LIABILITY (SIMPLE)
GREAT NORTHERN INSURANCE COMPANY FOREIGN EMPLOYEES LIABILITY
GREAT NORTHERN INSURANCE COMPANY FOREIGN PROPERTY (SIMPLE)
GREAT NORTHERN INSURANCE COMPANY FOREIGN AUTO
* ALL COVERAGE EXPIRES ON MAY 1, 1997.
EMPLOYMENT SCHEDULE
TO PURCHASE AGREEMENT
Attachment F to this Schedule contains a copy of the Company's 1996 Stock
Option Plan and forms of Notice of Exercise and Early Exercise Stock Purchase
Agreement.
COMPLIANCE SCHEDULE
TO PURCHASE AGREEMENT
NONE.
AFFILIATED TRANSACTION SCHEDULE
TO PURCHASE AGREEMENT
NONE.
