EXHIBIT II
EXECUTION COPY
__________________________________________
STOCK PURCHASE AGREEMENT
__________________________________________
Between
INTERCEL, INC.
and
SCANA COMMUNICATIONS, INC.
Dated as of May 23, 1997
1
TABLES OF CONTENTS
ARTICLE I DEFINITIONS. . . . . . . . . . . . . . . . . . . 1
SECTION 1.1 Certain Defined Terms . . . . . . . . . . . . 1
ARTICLE II PURCHASE AND SALE . . . . . . . . . . . . . . . 7
SECTION 2.1 Purchase and Sale of the Shares . . . . . . 7
SECTION 2.2 Purchase Price. . . . . . . . . . . . . . . 7
SECTION 2.3 Closing . . . . . . . . . . . . . . . . . . 7
SECTION 2.4 Escrow. . . . . . . . . . . . . . . . . . . 7
SECTION 2.5 Closing Deliveries by the Seller. . . . . . 8
SECTION 2.6 Closing Deliveries by the Purchaser . . . . 8
SECTION 2.7 Closing Deliveries by the Escrow Agent. . . 8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER . . 8
SECTION 3.1 Organization, Authority and
Qualification of the Seller . . . . . . . . 8
SECTION 3.2 Capitalization of the Seller. . . . . . . . 9
SECTION 3.3 Subsidiaries. . . . . . . . . . . . . . . . 9
SECTION 3.4 No Conflict . . . . . . . . . . . . . . . . 9
SECTION 3.5 Governmental Consents and Approvals . . . . 10
SECTION 3.6 Seller SEC Documents: Financial Statements. 10
SECTION 3.7 No Undisclosed Liabilities. . . . . . . . . 11
SECTION 3.8 Conduct in the Ordinary Course: Absence
of Certain Changes, Events and Conditions . 11
SECTION 3.9 Litigation. . . . . . . . . . . . . . . . . 11
SECTION 3.10 Compliance with Laws. . . . . . . . . . . . 12
SECTION 3.11 Full Disclosure . . . . . . . . . . . . . . 12
SECTION 3.13 Private Placement . . . . . . . . . . . . . 12
SECTION 3.14 FCC Regulations . . . . . . . . . . . . . . 12
SECTION 3.15 Brokers . . . . . . . . . . . . . . . . . . 12
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. 12
SECTION 4.1 Organization and Authority of the
Purchaser . . . . . . . . . . . . . . . . . 12
SECTION 4.2 No Conflict . . . . . . . . . . . . . . . . 13
SECTION 4.3 Governmental Consents and Approvals . . . . 13
SECTION 4.4 Litigation . . . . . . . . . . . . . . . . 13
SECTION 4.5 Investment Purpose. . . . . . . . . . . . . 13
SECTION 4.6 Accredited Investor . . . . . . . . . . . . 14
SECTION 4.7 Brokers . . . . . . . . . . . . . . . . . . 14
ARTICLE V ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . 14
SECTION 5.1 Filing of Certificate of Designation. . . . 14
SECTION 5.2 Treatment of Shares as Equity . . . . . . . 14
SECTION 5.3 Regulatory and Other Authorizations:
Notices and Consents. . . . . . . . . . . . 14
1
SECTION 5.4 Notice of Developments. . . . . . . . . . . 15
SECTION 5.5 Registration Rights . . . . . . . . . . . . 15
SECTION 5.6 Resale Restrictions . . . . . . . . . . . . 15
SECTION 5.7 Registration of Shares. . . . . . . . . . . 15
SECTION 5.9 Certain Information . . . . . . . . . . . . 16
SECTION 5.10 Conduct of Business of the Seller . . . . . 16
SECTION 5.11 Further Action . . . . . . . . . . . . . . 16
ARTICLE VI CONDITIONS TO CLOSING . . . . . . . . . . . . . . 17
SECTION 6.1 Conditions to Obligations of the Seller . . 17
SECTION 6.2 Conditions to Obligations of the Purchaser. 18
ARTICLE VII INDEMNIFICATION . . . . . . . . . . . . . . . . . 19
SECTION 7.1 Survival of Representations and Warranties. 19
SECTION 7.2 Indemnification . . . . . . . . . . . . . . 20
SECTION 7.3 Limits on Indemnification . . . . . . . . . 22
ARTICLE VIII TERMINATION AND WAIVER. . . . . . . . . . . . . . 22
SECTION 8.1 Termination . . . . . . . . . . . . . . . . 22
SECTION 8.2 Effect of Termination . . . . . . . . . . . 23
SECTION 8.3 Waiver. . . . . . . . . . . . . . . . . . . 23
ARTICLE IX GENERAL PROVISIONS. . . . . . . . . . . . . . . . 23
SECTION 9.1 Expenses. . . . . . . . . . . . . . . . . . 23
SECTION 9.2 Notices . . . . . . . . . . . . . . . . . . 23
SECTION 9.3 Public Announcements. . . . . . . . . . . . 24
SECTION 9.4 Headings. . . . . . . . . . . . . . . . . . 25
SECTION 9.5 Severability. . . . . . . . . . . . . . . . 25
SECTION 9.6 Entire Agreement. . . . . . . . . . . . . . 25
SECTION 9.7 Assignment. . . . . . . . . . . . . . . . . 25
SECTION 9.8 No Third Party Beneficiaries. . . . . . . . 25
SECTION 9.9 Amendment . . . . . . . . . . . . . . . . . 25
SECTION 9.10 Governing Law . . . . . . . . . . . . . . . 25
SECTION 9.11 Counterparts. . . . . . . . . . . . . . . . 25
SECTION 9.12 Specific Performance. . . . . . . . . . . . 26
EXHIBITS
EXHIBIT 2.4 Form of Escrow Agreement
ANNEXES
ANNEX I. . . . . . . . . . . . . . . . . . . . . . . . . . I-1
ANNEX II . . . . . . . . . . . . . . . . . . . . . . . . . II-1
ANNEX III. . . . . . . . . . . . . . . . . . . . . . . . . III-1
ANNEX IV . . . . . . . . . . . . . . . . . . . . . . . . . IV-1
2
THIS STOCK PURCHASE AGREEMENT, dated as of May 23, 1997, is
entered into between INTERCEL, INC., a Delaware corporation (the
"Seller"), and SCANA COMMUNICATIONS, INC., a South Carolina
corporation (the "Purchaser").
W I T N E S S E T H:
WHEREAS, the Seller wishes to issue and to sell to the
Purchaser, and the Purchaser wishes to purchase from the Seller,
50,000 shares (the "Shares") of a new series of convertible
preferred stock of the Seller designated Series D Convertible
Preferred Stock, par value $0.01 per share (the "Preferred Stock"),
upon the terms and subject to the conditions set forth herein; and
WHEREAS, the terms of the Preferred Stock are set forth in the
Certificate of Designation filed with the Secretary of State of the
State of Delaware on March 13, 1997, a copy of which is attached as
Annex I hereto, as amended or to be amended as set forth in Annex
IV.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements and covenants hereinafter set forth, the
Purchaser and the Seller hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain Defined Terms. As used in this
Agreement, the following terms shall have the following meanings:
"Acquisition Documents" has the meaning specified in Section
7.1.
"Action" means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental
Authority.
"Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common
control with, such specified Person.
"Agreement" or "this Agreement" means this Stock Purchase
Agreement, dated as of May __, 1997, between the Seller and the
Purchaser (including the Annexes hereto, the Exhibits hereto and
the Disclosure Schedule) and all amendments hereto made in
accordance with the provisions of Section 9.9.
"Approvals" has the meaning specified in Section 3.5.
3
"Assets" means the properties, assets (including, without
limitation, Licenses) and contract rights used or intended to be
used in the conduct of Business or otherwise owned, leased or used
by the Seller or any Subsidiary or, with respect to contract
rights, to which the Seller or any Subsidiary is a party or is
bound.
"Beneficially Own" with respect to any securities and
"Beneficial Ownership" mean having beneficial ownership as
determined pursuant to Rule 13d-3 under the Exchange Act including
having beneficial ownership pursuant to any agreement, arrangement
or understanding, whether or not in writing.
"Business" means the business of the Seller and the
Subsidiaries as currently conducted and contemplated as of the date
hereof by the Seller to be conducted (as described in the Debt
Offering Memorandum or contemplated by this Agreement); provided,
however, that the Business of Seller shall not be deemed to include
or refer to the business of providing cellular telephone and
related services as formerly conducted by Unity Cellular Systems,
Inc., a Maine corporation and a subsidiary of the Seller, and
Northern Maine Cellular Partnership, a Maine general partnership
and a former majority-owned subsidiary of Unity Cellular Systems,
Inc.
"Business Day" means any day other than a Saturday, Sunday or
a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Certificate of Designation" means the Certificate of
Designation for the Preferred Stock as filed with the Secretary of
State of the State of Delaware on March 13, 1997 and attached
hereto as Annex I, as amended or to be amended as set forth in
Annex IV hereto.
"Closing" has the meaning specified in Section 2.3.
"Closing Date" has the meaning specified in Section 2.3.
"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means the common stock, par value $0.01 per
share, of the Seller.
"Control" (including the terms "controlled by" and "under
common control with"), with respect to the relationship between or
among two or more Persons, means the possession, directly or
indirectly or as trustee or executor, of the power to direct or
cause the direction of the affairs or management of a Person,
whether through the ownership of voting securities, as trustee or
executor, by contract or otherwise, including, without limitation,
the ownership, directly or indirectly, of securities having the
power to elect a majority of the board of directors or similar body
governing the affairs of such Person.
4
"Current Market Value" means, as of a particular date, the
average of the closing high bid and low asked prices per share of
Common Stock in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated
Quotation System or such other system then in use, or such other
exchange or inter-dealer quotation system on which the Common Stock
is then principally traded or authorized to be quoted.
"Debt Offering Memorandum" means the draft (as of May 20,
1997) of the Confidential Offering Memorandum (subject to
completion, revision and amendment pursuant to the agreement of the
Seller and the placement agents thereunder) relating to the
proposed issuance by the Seller of High Yield Debt instruments for
aggregate gross proceeds of not less than $100 million.
"Disclosed by Seller" with respect to information concerning
any event, fact or circumstance, includes information contained in
the Seller's SEC Reports, annual and other reports furnished by
Seller to its stockholders as a group, and press releases of the
Seller disseminated to (i) the Dow Xxxxx News Service, or (ii) the
National Association of Securities Dealers, Inc. Automated
Quotation System or other national securities exchange ("Press
Releases"), as well as information disclosed directly to Purchaser
by Seller in this Agreement, the Debt Offering Memorandum, the 1996
Financial Statements, the 1997 Financial Statements or in writing
and attached hereto or delivered pursuant to Section 6.2 hereof.
For as long as Purchaser has a representative on the Seller's Board
of Directors, "Disclosed by Seller" shall also mean written
information and materials which are disclosed or distributed to the
Seller's Board of Directors or written evidence of the meetings of
the Board of Directors and committees thereof (such as minutes,
resolutions and written consents). The Press Releases issued by
Seller since September 30, 1996 are attached hereto in the
Disclosure Schedule.
"Disclosure Schedule" means the Disclosure Schedule attached
hereto, dated as of the date hereof, and forming a part of this
Agreement.
"Employee Benefit Plan" means any employee benefit plan within
the meaning of Section 3(3) of ERISA which is (i) maintained by, or
for employees of, the Seller, any of its Subsidiaries or any ERISA
Affiliate or (ii) has at any time within the preceding six years
been maintained by, or for the employee of, the Seller, any of its
Subsidiaries or any current or former ERISA Affiliate.
"Encumbrance" means any security interest, pledge, mortgage,
lien, charge, encumbrance, adverse claim, preferential arrangement
or restriction of any kind, including, without limitation, any
restriction on the use, voting, transfer, receipt of income or
other exercise of any attributes of ownership.
5
"Environmental Actions" means any complaint, summons,
citation, notice, directive, order, claim, litigation,
investigation, proceeding, judgment, letter or other communication
from or to any Governmental Authority, or any other Person
involving or alleging violations of Environmental Laws or Releases
of Hazardous Materials from (i) any assets, properties or
businesses of the Seller or any of its Subsidiaries (or its or
their corporate predecessors); (ii) from adjoining properties or
businesses; or (iii) from or onto any facilities which received
Hazardous Materials generated by the Seller or any of its
Subsidiaries (or its or their corporate predecessors).
"Environmental Laws" means the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq.,
as amended; the Resource Conservation and Recovery Act, 42 U.S.C.
6901 et seq;, as amended; the Clean Air Act, 42 U.S.C. 7401 et
seq., as amended; the Clean Water Act, 33 U.S.C. 1251 et seq., as
amended; the Occupational Safety and Health Act, 29 U.S.C. 655 et
seq., and any other Governmental Authority's laws, statutes,
regulations, rules or ordinances imposing liability or establishing
standards of conduct or emission for protection or safety of the
environment or concerning public or occupational health.
"ERISA" means the federal Employee Retirement Income Security
Act of 1974, any successor statute of similar import, and the rules
and regulations thereunder, collectively and as from time to time
amended and in effect.
"ERISA Affiliate," as applied to the Seller or any of its
Subsidiaries, means any Person who is a member of a group which is
under common control with the Seller or any of its Subsidiaries, or
who together with the Seller or any of its Subsidiaries is treated
as a single employer within the meaning of Section 414(b) and (c)
of the Internal Revenue Code of 1986, as amended.
"Escrow Agent" has the meaning specified in the Escrow
Agreement.
"Escrow Agreement" has the meaning specified in Section 2.4.
"Exchange Act" means the United States Securities Exchange Act
of 1934, as amended.
"Executive Officer" has the meaning set forth in Rule 405 of
Regulation C adopted by the Commission under the Securities Act
without regard to whether any party to this Agreement is a
registrant as used in Rule 405.
"FCC" means the United States Federal Communications
Commission.
"FCC Licenses" means all licenses granted by the FCC to the
Seller for and related to the provisions of personal communications
services and cellular services in connection with the Seller's
Business.
6
"Governmental Authority" means any United States federal, state
or local or any foreign government, governmental, regulatory or
administrative authority, agency, department, board, investigative
body or commission or any court, tribunal, or judicial or arbitral
body or other tribunal.
"Governmental Order" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by
or with any Governmental Authority.
"Hazardous Materials" means (a) any element, compound,
chemical or other material (in whatever form or state) that is
defined, listed or otherwise classified as a contaminant,
pollutant, toxic pollutant, toxic or hazardous substance, extremely
hazardous substance or chemical, hazardous waste, special waste, or
solid waste under any Environmental Law; (b) petroleum and its
refined products and by-products; (c) polychlorinated biphenyls;
(d) any substance exhibiting a hazardous waste characteristic
including but not limited to corrosivity, ignitability, toxicity or
reactivity as well as any radioactive or explosive materials and
materials otherwise damaging to the environment; and (e) any raw
materials, building components, including but not limited to
asbestos-containing materials, and manufactured products containing
any of the materials or substances described in (a) through (d).
"High Yield Debt" means the issue of high yield debt
instruments proposed to be sold by the Seller pursuant to the Debt
Offering Memorandum.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended, and the rules and regulations promulgated
thereunder.
"IRS" means the Internal Revenue Service or any successor
thereto.
"Knowledge" of a party with respect to such party's
representation or warranty concerning any event, fact or
circumstance means the current actual knowledge of that party's
Executive Officers of information which, after reasonable
consideration by such Executive Officers, would be recognized by
reasonable persons of similar experience in such positions as
relevant to the representation or warranty qualified by the words
"to the knowledge" of a party, "known to" a party or a similar
phrase. Knowledge does not include information not within such
current actual knowledge that might be revealed if the party's
files were searched or if any other investigation were made.
"Law" means any United States federal, state, local or foreign
statute, law, ordinance, regulation, rule, code, order, other
requirement or rule of law, including, without limitation, any
requirement or rule of law of the FCC.
7
"Liabilities" means any and all debts, liabilities and
obligations, whether accrued or fixed, absolute or contingent,
matured or unmatured or determined or determinable, including,
without limitation, those arising under any Law, Action or
Governmental Order and those arising under any contract, agreement,
arrangement, commitment or undertaking.
"Licenses" means all FCC Licenses and all other licenses,
permits (including construction permits), consents, approvals and
other authority issued by any Governmental Authority in connection
with the legal and proper operation of the Seller's Business.
"Loss" has the meaning specified in Section 7.2.
"Material Adverse Effect" means any circumstance, change in,
or effect on the Business, the Seller or any Subsidiary that,
individually or in the aggregate with any other circumstances,
changes in, or effects on, the Business, the Seller or any
Subsidiary: (a) is, or would reasonably be expected to be,
materially adverse to the Business, operations, Assets or
Liabilities, prospects, results of operations or financial
condition of the Seller and the Subsidiaries, taken as a whole, or
(b) would reasonably be expected to materially adversely affect the
ability of the Seller and the Subsidiaries to operate or conduct
the Business in the manner in which it is currently operated or
conducted or contemplated to be operated or conducted by the Seller
and the Subsidiaries.
"Person" means any individual, partnership, limited liability
company, firm, corporation, association, trust, joint venture,
unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a person under
Section 13(d)(3) of the Exchange Act.
"Preferred Stock" has the meaning specified in the recitals to
this Agreement.
"Purchase Price" has the meaning specified in Section 2.2.
"Purchaser" has the meaning specified in the preamble to this
Agreement.
"Reference Balance Sheet" means the unaudited consolidated
balance sheet (including the related notes and schedules thereto)
of the Seller, dated as of March 31, 1997, a copy of which the
Seller has provided to the Purchaser prior to the execution of this
Agreement.
"Reference Balance Sheet Date" means March 31, 1997.
"Related Agreements" has the meaning specified in Annex III
attached hereto.
8
"Release" means any spilling, leaking, pumping, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or
disposing (including the abandonment or discarding of barrels,
containers or other closed receptacles containing Hazardous
Materials) of Hazardous Materials into the environment.
"Sale" has the meaning specified in Section 5.9(b).
"SEC Reports" has the meaning specified in Section 3.6(a).
"Securities Act" means the United States Securities Act of
1933, as amended.
"Seller" has the meaning specified in the preamble to this
Agreement.
"Series C Preferred Stock Purchase Agreement" means that
certain Stock Purchase Agreement of even date herewith between the
Seller and The Xxxx Alternative Income Fund, L.P., a Delaware
limited partnership, as purchaser thereunder, with respect to the
sale and purchase of 50,000 shares of Seller's Series C Preferred
Stock ("Series C Preferred Stock"), together with all attachments,
annexes and exhibits thereto, all documents and agreements executed
in connection therewith, and all amendments, supplements and
modifications thereof.
"Shares" has the meaning specified in the recitals to this
Agreement.
"Subsidiaries" means any and all Persons controlled by the
Seller directly or indirectly through one or more intermediaries;
provided, however, that the term "Subsidiaries" shall not include
either Unity Cellular Systems, Inc. or Northern Maine Cellular
Partnership.
"Tax" or "Taxes" means any and all taxes, fees, levies,
assessments, duties, tariffs, imposts, and other charges of any
kind (together with any and all interest, penalties, additions to
tax and additional amounts imposed with respect thereto) imposed by
any government or taxing authority, including, without limitation:
taxes or other charges on or with respect to income, franchises,
windfall or other profits, gross receipts, property, sales, use,
capital stock, payroll, employment, social security, workers'
compensation, unemployment compensation, or net worth; taxes or
other charges in the nature of excise, withholding, ad valorem,
stamp, transfer, value added, or gains taxes; license, registration
and documentation fees; and customs duties, tariffs, and similar
charges.
"Third Party Claims" has the meaning specified in Section
7.2(b).
"U.S. GAAP" means United States generally accepted accounting
principles and practices as in effect from time to time and applied
consistently throughout the periods involved.
9
"1996 Financial Statements" means the audited annual
consolidated financial statements and the notes and schedules
thereto for the year ended December 31, 1996.
"1997 Financial Statements" has the meaning specified in
Section 3.2(b).
ARTICLE II
PURCHASE AND SALE
SECTION 2.1 Purchase and Sale of the Shares. Upon the terms
and subject to the conditions of this Agreement, at the Closing,
the Seller shall sell to the Purchaser, and the Purchaser shall
purchase from the Seller, the Shares.
SECTION 2.2 Purchase Price. The aggregate purchase price
for the Shares shall be $22,500,000.00 (the "Purchase Price"),
representing a purchase price of $450.00 per Share.
SECTION 2.3 Closing. Upon the terms and subject to the
conditions of this Agreement, the issuance, sale and purchase of
the Shares contemplated by this Agreement shall take place at a
closing (the "Closing") to be held at 10:00 A.M. local time on a
date and at a location mutually agreed to by the parties upon the
satisfaction or waiver of all conditions to the obligations of the
parties set forth in Article VI, or at such other place or at such
other time or on such other date as the Seller and the Purchaser
may mutually agree upon in writing (the day on which the Closing
takes place being the "Closing Date"). The parties agree that the
Closing Date shall be the date on which pricing of the offering of
the High Yield Debt is scheduled to occur between the Seller and
the lead placement agent under the Debt Offering Memorandum, which
date is currently contemplated to be on or about June 4, 1997. The
Seller agrees to provide the Purchaser notice of any change in the
date on which such pricing is scheduled to occur as soon as
reasonably practicable after such new pricing date is established
and, in any event, at least two (2) days prior to such new pricing
date.
SECTION 2.4 Escrow. On or before the Closing Date, the
Seller, the Purchaser and the Escrow Agent shall enter into an
Escrow Agreement with the Escrow Agent substantially in the form of
Exhibit 2.4 (the "Escrow Agreement"). In accordance with the terms
of the Escrow Agreement, on or before the Closing Date, the
Purchaser shall deposit with the Escrow Agent the Purchase Price,
to be managed and paid out by the Escrow Agent in accordance with
the terms of the Escrow Agreement, and the Seller shall deposit
with the Escrow Agent a stock certificate(s) evidencing the Shares,
to be held and delivered by the Escrow Agent in accordance with the
terms and provisions of the Escrow Agreement.
10
SECTION 2.5 Closing Deliveries by the Seller. At the
Closing, the Seller shall deliver or cause to be delivered to the
Purchaser the opinions, certificates and other documents required
to be delivered pursuant to Section 6.2, and to the Escrow Agent,
stock certificate(s) evidencing the Shares duly registered in the
name of the Purchaser.
SECTION 2.6 Closing Deliveries by the Purchaser. At the
Closing, the Purchaser shall deliver to the Seller the opinions,
certificates and other documents required to be delivered pursuant
to Section 6.1, and shall deliver the Purchase Price monies to the
Escrow Agent in accordance with the Escrow Agreement.
SECTION 2.7 Closing Deliveries by the Escrow Agent. At or
before the Closing, the Escrow Agent shall accept and hold the
Purchase Price monies and stock certificate(s) evidencing the
Shares pursuant thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLER
As an inducement to the Purchaser to enter into this
Agreement, the Seller hereby represents and warrants to the
Purchaser as set forth in Annex III hereto (which is incorporated
herein by reference) and as follows:
SECTION 3.1 Organization, Authority and Qualification of the
Seller. The Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Delaware and has all necessary power and authority to enter into
this Agreement and the Escrow Agreement, to carry out its
obligations hereunder and thereunder, to consummate the
transactions contemplated hereby and thereby and to conduct its
Business, except where the failure to be so qualified or in good
standing would not have a Material Adverse Effect. The Seller is
duly licensed or qualified to do business and is in good standing
in each jurisdiction in which the properties owned or leased by it
or the operation of its Business makes such licensing or
qualification necessary, except as would not have a Material
Adverse Effect. The execution and delivery of this Agreement and
the Escrow Agreement by the Seller, the performance by the Seller
of its obligations hereunder and thereunder and the consummation by
the Seller of the transactions contemplated hereby and thereby,
including, without limitation, the issuance of the Preferred Stock
in accordance with the terms of this Agreement and the Certificate
of Designation, have been duly authorized by all requisite action
on the part of the Seller. This Agreement and the Escrow Agreement
have been duly executed and delivered by the Seller, and (assuming
due authorization, execution and delivery by the Purchaser) this
Agreement and the Escrow Agreement constitute the legal, valid and
binding obligations of the Seller enforceable against the Seller in
accordance with their respective terms.
11
SECTION 3.2 Capitalization of the Seller. 1. The
authorized capital stock of the Seller consists of 55,000,000
shares of Common Stock and 1,000,000 shares of preferred stock, par
value $0.01 per share. As of May 20, 1997, (i) 26,865,099 shares
of Common Stock are issued and outstanding, all of which are
validly issued, fully paid and nonassessable and (ii) 200,000
shares of preferred stock are issued and outstanding (not including
the Preferred Stock and the Series C Preferred Stock). None of the
issued and outstanding shares of Common Stock or preferred stock
was issued in violation of any preemptive rights. Except as
disclosed in Schedule 3.2 of the Disclosure Schedule, there are no
options, warrants, convertible securities or other rights,
agreements, arrangements or commitments of any character to which
the Seller is a party relating to the issuance or sale of capital
stock of the Seller or obligating the Seller to issue or sell any
shares of capital stock of, or any other equity interest in, the
Seller or its Subsidiaries. Except as disclosed in Schedule 3.2 of
the Disclosure Schedule, there are no outstanding contractual
obligations of the Seller to repurchase, redeem or otherwise
acquire any shares of Common Stock or shares of capital stock of
its Subsidiaries. Upon issuance of the Shares to the Purchaser at
the Closing and payment therefor pursuant to this Agreement and the
Certificate of Designation, the Shares will be validly issued,
fully paid and nonassessable and free of preemptive rights. By the
Closing Date, the shares of Common Stock issuable upon conversion
of the Shares will be duly authorized and reserved for issuance
upon such conversion and, upon issuance of such shares in
accordance with the Certificate of Designation, will be validly
issued, fully paid and nonassessable and free of preemptive rights.
Upon consummation of the transactions contemplated by this
Agreement, including the issuance of the Shares, registration of
the Shares in the name of the Purchaser in the stock records of the
Seller and delivery of the Shares as provided in the Escrow
Agreement, the Purchaser will own the Shares free and clear of all
Encumbrances, other than Encumbrances resulting from any action, or
failure to take action, by the Purchaser.
(b) The outstanding indebtedness of Seller as of
March 31, 1997 is accurately reflected (subject to normal and
recurring adjustments and other revisions which were not and are
not known or reasonably expected to be material in amount) in the
Seller's balance sheet at March 31, 1997 contained in the Seller's
unaudited quarterly consolidated financial statements and the notes
and schedules thereto for the quarter ended March 31, 1997 (the
"1997 Financial Statements").
SECTION 3.3 Subsidiaries. Each Subsidiary: (i) is duly
organized and validly existing under the laws of its jurisdiction
of organization; (ii) has all necessary power and authority to own,
operate or lease the properties and assets owned, operated or
leased by such Subsidiary and to carry on its business as it has
been and is currently conducted by such Subsidiary; and (iii) is
duly licensed or qualified to do business and is in good standing
in each jurisdiction in which the properties owned or leased by it
12
or the operation of its business makes such licensing or
qualification necessary or desirable, except where the failure to
be so duly licensed or qualified would not have a Material Adverse
Effect. Each Subsidiary is wholly owned, directly or indirectly,
by the Seller.
SECTION 3.4 No Conflict. Assuming that all Approvals
described in Section 3.5 have been obtained and all filings and
notifications listed in Schedule 3.5 of the Disclosure Schedule
have been made, the execution, delivery and performance of this
Agreement and the Escrow Agreement by the Seller, and the issuance
of the Shares and the performance of the Seller's obligations in
accordance with the Certificate of Designation, do not and will
not, as of the Closing Date: (i) violate, conflict with or result
in the breach of any provision of the certificate of incorporation
or by-laws (or similar organizational documents) of the Seller or
any Subsidiary; (ii) conflict with or violate (or cause an event
which could have a Material Adverse Effect as a result of) any Law
or Governmental Order applicable to the Seller, any Subsidiary or
any of their respective assets, properties or businesses; or (iii)
except as set forth in Schedule 3.4(iii) of the Disclosure
Schedule, conflict with, result in any breach of, constitute a
default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, require any consent under,
or give to others any rights of termination, amendment,
acceleration, suspension, revocation or cancellation of, or result
in the creation of any Encumbrance on any of the Shares or on any
of the assets or properties of the Seller or any Subsidiary
pursuant to, any note, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other
instrument or arrangement to which the Seller or any Subsidiary is
a party or by which any of the Shares or any of such assets or
properties is bound or affected.
SECTION 3.5 Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement and the
Escrow Agreement by the Seller do not and will not require any
consent, approval, authorization or other order of, action by,
filing with or notification to any Governmental Authority
(collectively, the "Approvals"), except: (i) as described in
Schedule 3.5 of the Disclosure Schedule; (ii) as may be required
pursuant to the notification requirements of the HSR Act; (iii) the
filing with the Secretary of State of the State of Delaware of the
Amendment to the Certificate of Designation contemplated by Section
5.1; and (iv) any filings required to effect any registration
pursuant to Section 5.5. Subject to the foregoing exceptions, the
Seller shall obtain the foregoing Approvals on or before the
Closing Date.
SECTION 3.6 Seller SEC Documents: Financial Statements.
(a) The Seller has filed all forms, reports and documents required
to be filed by it with the Commission, and has heretofore made
available to the Purchaser, in the form filed with the Commission
(excluding any exhibits thereto), (A) its Annual Reports on Form
10-K for the fiscal years ended December 31, 1996 and 1995, (B) its
13
Quarterly Reports on Form 10-Q for the periods ended March 31,
1996, June 30, 1996, September 30, 1996 and March 31, 1997, (C) all
proxy statements relating to the Seller's meetings of stockholders
(whether annual or special) held since December 31, 1995, (D) the
Seller's Prospectus dated April 16, 1996 and the related
Registration Statement on Form S-1 with respect to the offering by
Seller of certain debt obligations which mature in 2006, and (E)
its Current Reports on Form 8-K dated after December 31, 1995 (the
forms, reports and other documents referred to in clauses (A), (B),
(C), (D) and (E) above being referred to herein, collectively, as
the "SEC Reports").
(b) Except as set forth on Schedule 3.6 of the
Disclosure Schedule, the SEC Reports and any other forms, reports
and other documents filed by the Seller with the Commission as of
the date of this Agreement: (i) were prepared in all material
respects in accordance with the requirements of the Securities Act
and the Exchange Act, as the case may be, and the rules and
regulations thereunder; and (ii) did not at the time they were
filed contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements made therein, in light of the
circumstances under which they were made, not misleading.
(c) The financial statements (including, in each case,
any notes thereto) contained in the SEC Reports were prepared in
accordance with U.S. GAAP applied on a consistent basis throughout
the periods indicated (except as may be indicated in the notes
thereto) and each fairly presented the financial position, results
of operations and cash flows of the Seller and its consolidated
subsidiaries as at the respective dates thereof and for the
respective periods indicated therein (subject, in the case of
unaudited statements, to normal and recurring year-end adjustments
which were not and are not known or reasonably expected,
individually or in the aggregate, to be material in amount).
(d) Since March 31, 1997 there has not been any change,
occurrence or circumstance in the Business, results of operations
or financial condition of the Seller or any Subsidiary having,
individually or in the aggregate, a Material Adverse Effect, other
than changes, occurrences and circumstances referred to in any
subsequently filed SEC Reports or otherwise Disclosed by Seller.
SECTION 3.7 No Undisclosed Liabilities. There are no
Liabilities of the Seller or any Subsidiary, other than
Liabilities: (i) disclosed in Schedule 3.7 of the Disclosure
Schedule; (ii) reflected in the SEC Reports, the 1996 Financial
Statements or the 1997 Financial Statements or otherwise Disclosed
by Seller; (iii) not required to be reflected in a consolidated
balance sheet of the Seller and its Subsidiaries or in the notes
thereto prepared in accordance with U.S. GAAP; or (iv) incurred
since the Reference Balance Sheet Date in the ordinary course of
business and which do not have a Material Adverse Effect.
14
SECTION 3.8 Conduct in the Ordinary Course: Absence of
Certain Changes, Events and Conditions. Since the Reference
Balance Sheet Date, except as Disclosed by Seller in any
subsequently filed SEC Reports or Press Releases, as reflected in
the 1996 Financial Statements, the 1997 Financial Statements or as
contemplated by this Agreement, the Business of the Seller and the
Subsidiaries has been conducted in the ordinary course and the
Seller has not suffered any Material Adverse Effect.
SECTION 3.9 Litigation. Except as set forth in the SEC
Reports, as reflected in the 1996 Financial Statements or the 1997
Financial Statements, as disclosed in Schedule 3.9 of the
Disclosure Schedule or otherwise Disclosed by Seller, there are no
Actions by or against the Seller or any Subsidiary (or by or
against any Affiliate thereof and relating to the Business, the
Seller or any Subsidiary), or affecting any of the Assets, pending
before any Governmental Authority (or, to the knowledge of the
Seller, threatened to be brought by or before any Governmental
Authority) that has, has had or could reasonably be expected to
have a Material Adverse Effect or could reasonably be expected to
affect the legality, validity or enforceability of this Agreement
or the Escrow Agreement or the consummation of the transactions
contemplated hereby or thereby. None of the Seller, the
Subsidiaries nor any of the Assets is subject to any Governmental
Order (nor, to the knowledge of the Seller, are there any such
Governmental Orders threatened to be imposed by any Governmental
Authority) which has, has had or could have a Material Adverse
Effect.
SECTION 3.10 Compliance with Laws. The Seller and the
Subsidiaries have each conducted and continue to conduct the
Business in all material respects in accordance with all Laws and
Governmental Orders applicable to the Seller or any Subsidiary or
any of the Assets or the Business, and neither the Seller nor any
Subsidiary is in material violation of any such Law or Governmental
Order.
SECTION 3.11 Full Disclosure. The Seller is not aware of any
facts pertaining to the Seller, any Subsidiary or the Business
which could reasonably be expected to have a Material Adverse
Effect and which have not been disclosed in this Agreement, the
Disclosure Schedule, the SEC Reports or otherwise Disclosed by
Seller.
SECTION 3.12 Delivery of Certain Documents. The Seller has
delivered to the Purchaser a true and complete copy of the 1996
Financial Statements and the 1997 Financial Statements, and the
most recent drafts of the Debt Offering Memorandum and all Related
Agreements.
SECTION 3.13 Private Placement. Assuming the accuracy of the
representations and warranties of the Purchaser contained in
Sections 4.5 and 4.6, the offer and sale of the Shares to the
Purchaser pursuant to this Agreement is exempt from registration
under the Securities Act.
15
SECTION 3.14 FCC Regulations. After giving effect to the
issuance of Shares to the Purchaser, the ownership of capital stock
of the Seller by aliens or their representatives or by a foreign
government or representative thereof or by any corporation
organized under the laws of a foreign country does not exceed the
limitations set forth in rules and regulations of the FCC.
SECTION 3.15 Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission
in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Seller.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As an inducement to the Seller to enter into this Agreement,
the Purchaser hereby represents and warrants to the Seller as
follows:
SECTION 4.1 Organization and Authority of the Purchaser.
The Purchaser is a corporation duly organized, validly existing and
in good standing under the laws of the State of South Carolina and
has all necessary corporate power and authority to enter into this
Agreement and the Escrow Agreement, to carry out its obligations
hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of
this Agreement and the Escrow Agreement by the Purchaser, the
performance by the Purchaser of its obligations hereunder and
thereunder and the consummation by the Purchaser of the
transactions contemplated hereby and thereby have been duly
authorized by all requisite action on the part of the Purchaser.
This Agreement and the Escrow Agreement have been duly executed and
delivered by the Purchaser, and (assuming due authorization,
execution and delivery by the Seller) this Agreement and the Escrow
Agreement constitute the legal, valid and binding obligations of
the Purchaser enforceable against the Purchaser in accordance with
their respective terms.
SECTION 4.2 No Conflict. Except as disclosed by the
Purchaser to the Seller in writing prior to Closing, assuming
compliance with the notification requirements of the HSR Act and
the making and obtaining of all filings, notifications, consents,
approvals, authorizations and other actions referred to in Section
4.3, and except as may result from any facts or circumstances
relating solely to the Seller, the execution, delivery and
performance of this Agreement and the Escrow Agreement by the
Purchaser do not and will not, as of the date hereof and as of the
Closing Date: (i) violate, conflict with or result in the breach of
any provision of the articles of incorporation or by-laws of the
Purchaser; (ii) conflict with or violate any Law or Governmental
Order applicable to the Purchaser; or (iii) conflict with, or
result in any breach of, constitute a default (or event which with
the giving of notice or lapse or time; or both, would become a
16
default) under, require any consent under, or give to others any
rights of termination, amendment, acceleration, suspension,
revocation, or cancellation of, or result in the creation of any
Encumbrance on any of the assets or properties of the Purchaser
pursuant to, any note, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other
instrument or arrangement to which the Purchaser is a party or by
which any of such assets or properties are bound or affected, which
in any such case would have a material adverse effect on the
ability of the Purchaser to consummate the transactions
contemplated by this Agreement or the Escrow Agreement.
SECTION 4.3 Governmental Consents and Approvals. The
execution, delivery and performance of this Agreement and the
Escrow Agreement by the Purchaser do not and will not require any
Approvals, except pursuant to the notification requirements of the
HSR Act and the filing requirements of Sections 13 and 16(a) of the
Exchange Act. The Purchaser shall obtain or comply with such
Approval requirements in a timely manner.
SECTION 4.4 Litigation. There are no Actions by or against
the Purchaser, pending before any Governmental Authority (or, to
the knowledge of the Purchaser, threatened to be brought by or
before any Governmental Authority) that could reasonably be
expected to affect the legality, validity or enforceability of this
Agreement or the Escrow Agreement or the consummation of the
transactions contemplated hereby or thereby. The Purchaser is not
subject to any Governmental Order (nor, to the knowledge of the
Purchaser, are there any such Governmental Orders threatened to be
imposed by any Governmental Authority), which could reasonably be
expected to materially adversely affect the legality, validity or
enforceability of this Agreement or the Escrow Agreement or the
consummation of the transactions contemplated hereby or thereby.
SECTION 4.5 Investment Purpose. The Purchaser is acquiring
the Shares and the shares of Common Stock to be issued upon
conversion for its own account solely for the purpose of investment
and not with a view to, or for offer or sale in connection with,
any distribution thereof.
SECTION 4.6 Accredited Investor. The Purchaser is an
"accredited investor" within the meaning of Rule 501 under the
Securities Act.
SECTION 4.7 Brokers. No broker, finder or investment banker
is entitled to any brokerage, finder's or other fee or commission
in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Purchaser.
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ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 Filing of Certificate of Designation. The
Seller covenants and agrees that at or prior to the Closing, the
Seller will file the Amendment to the Certificate of Designation,
a copy of which is attached as Annex IV hereto, with the Secretary
of State of the State of Delaware in accordance with the Delaware
General Corporation Law and cause the Certificate of Designation,
as amended, to be effective thereunder.
SECTION 5.2 Treatment of Shares as Equity. The Seller
covenants and agrees that it will treat the Shares as equity, and
not as debt, for accounting and tax purposes and further covenants
and agrees that it will not take any action or position that is
inconsistent with such treatment.
SECTION 5.3 Regulatory and Other Authorizations: Notices
and Consents. (a) The Seller and the Purchaser shall use all
reasonable efforts to obtain all Approvals of all Governmental
Authorities that may be or become necessary for each of them to
obtain for their execution and delivery of, and the performance of
their respective obligations pursuant to, this Agreement and the
Escrow Agreement. Each party hereto agrees to make an appropriate
filing pursuant to the HSR Act, if required, with respect to the
conversion of the Shares at such times as the Purchaser may request
and to supply as promptly as practicable to the appropriate
Governmental Authorities any additional information and documentary
material that may be requested pursuant to the HSR Act.
(b) The Seller shall or shall cause the Subsidiaries
to give promptly such notices to third parties and use its or their
reasonable efforts to obtain such third party consents as are
necessary in connection with the transactions contemplated by this
Agreement.
(c) The Purchaser shall cooperate and use all
reasonable efforts to assist the Seller in giving such notices and
obtaining such consents; provided, however, that the Purchaser
shall have no obligation to give any guarantee or other
consideration of any nature in connection with any such notice or
consent or to consent to any change in the terms of any agreement
or arrangement which the Purchaser in its sole and absolute
discretion may deem adverse to the interests of the Purchaser.
SECTION 5.4 Notice of Developments. 2. Prior to the
Closing, the Seller shall promptly notify the Purchaser in writing
of: (i) all events, circumstances, facts and occurrences arising
subsequent to the date of this Agreement which could reasonably be
expected to result in any breach of a representation or warranty or
covenant of the Seller in this Agreement or which could reasonably
be expected to have the effect of making any representation or
warranty of the Seller in this Agreement untrue or incorrect in any
respect; and (ii) all other developments material to the Seller and
18
the Subsidiaries, taken as a whole, affecting the Assets,
Liabilities, business, financial condition, operations, results of
operations or prospects of the Seller, any Subsidiary or the
Business.
(b) Prior to the Closing, the Purchaser shall promptly
notify the Seller in writing of all events, circumstances, facts
and occurrences arising subsequent to the date of this Agreement
which could reasonably be expected to result in any breach of a
representation or warranty or covenant of the Purchaser in this
Agreement or which could reasonably be expected to have the effect
of making any representation or warranty of the Purchaser in this
Agreement untrue or incorrect in any respect.
SECTION 5.5 Registration Rights. Effective at the
Closing, the Purchaser and the Seller shall each have the rights
and obligations set forth in Annex II, which is incorporated by
reference herein.
SECTION 5.6 Resale Restrictions. (a) The Purchaser
acknowledges that the Shares and the shares of Common Stock into
which the Shares are convertible have not been registered under the
Securities Act or any state securities law, and hereby agrees not
to offer, sell or otherwise transfer, pledge or hypothecate such
shares unless and until registered under the Securities Act and any
applicable state securities law or unless such offer, sale,
transfer, pledge or hypothecation is exempt from registration or is
otherwise in compliance with the Securities Act and such laws.
(b) During the period ending one year after the
Closing Date, the Purchaser shall not, without the prior written
consent of the Seller: (i) offer, pledge, sell or otherwise
transfer or dispose of, directly or indirectly, any Shares or any
shares of Common Stock into which any of such Shares may be
converted; or (ii) enter into any swap or similar agreement that
transfers, in whole or in part, any of the economic consequences of
ownership of such Shares or any shares of Common Stock into which
such Shares may be converted, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery
of Shares or such other securities, in cash or otherwise, other
than a pledge, grant of security interest or other encumbrance
effected in a bona fide transaction with an unrelated and
unaffiliated pledgee; provided, however, that the Purchaser may at
any time enter into any such transaction described in clause (i) or
(ii) above with an Affiliate of the Purchaser.
SECTION 5.7 Registration of Shares. The Seller shall,
upon issuance of the Shares and prior to the delivery of stock
certificates evidencing the Shares pursuant to Section 2.5,
register the Shares in the name of the Purchaser in the stock
records of the Seller.
19
SECTION 5.8 Delivery of Certain Documents. The Seller
shall deliver to the Purchaser true and correct copies of this
Agreement and the Related Agreements, the Escrow Agreement and all
exhibits, schedules, annexes and agreements related hereto and
thereto, as soon as practicable following the execution and
delivery hereof by the parties hereto and thereto.
SECTION 5.9 Certain Information. (a) For a period of at
least two years from the date of this Agreement, the Seller shall
file all reports and other information required to be filed by
Section 13 or 15(d) under the Exchange Act, as the case may be, as
shall be necessary in order that the conditions to the availability
of Rule 144 (as amended or to be amended) under the Securities Act
in connection with any Sale of shares of Common Stock by the
Purchaser shall be met. For so long as the Seller is required to
file reports and other information pursuant to Section 13 or 15(d)
of the Exchange Act and this Section 5.9(a), unless the Purchaser
no longer holds any Shares or shares of Common Stock, the Seller
shall provide the Purchaser with a paper copy of each such report
and other information at or about the same time as filed with the
Commission.
(b) For purposes of this Agreement, "Sale" means any
sale, assignment, transfer, distribution or other disposition of
shares of Common Stock or of a participation therein, whether
voluntarily or by operation of law.
SECTION 5.10 Conduct of Business of the Seller. Prior
to the Closing, the Seller agrees (except to the extent that the
Purchaser shall otherwise consent in writing) as follows:
(a) Dividends: Changes in Stock. The Seller shall not
take or permit to be taken any action that would result in an
adjustment to the Conversion Price (as defined in the Certificate
of Designation) pursuant to Section (7)(d) of the Certificate of
Designation if the Shares were issued and outstanding at the time
of such action.
(b) Certain Matters. The Seller shall not take or
permit to be taken any action in respect of which holders of Shares
would be entitled to vote pursuant to Section (9) of the
Certificate of Designation if the Shares were outstanding at the
time of such action.
SECTION 5.11 Further Action. Each of the parties hereto
shall use all reasonable efforts to take, or cause to be taken, all
appropriate action, do or cause to be done all things necessary,
proper or advisable under applicable Law, and execute and deliver
such documents and other papers, as may be required to carry out
the provisions of this Agreement and consummate and make effective
the transactions contemplated by this Agreement.
20
ARTICLE VI
CONDITIONS TO CLOSING
SECTION 6.1 Conditions to Obligations of the Seller. The
obligations of the Seller to execute this Agreement and perform its
obligations hereunder shall be subject to the satisfaction (or
waiver by the Seller, at its sole discretion), at or prior to the
Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Purchaser contained in this
Agreement shall have been true and correct in all material respects
when made and shall be true and correct in all material respects as
of the Closing, with the same force and effect as if made as of the
Closing, other than such representations and warranties as are made
as of another date, which shall be true and correct as of such date
(provided, however, that if any portion of any representation or
warranty is already qualified by materiality, for purposes of
determining whether this Section 6.1(a) has been satisfied with
respect to such portion of such representation or warranty, such
portion of such representation or warranty as so qualified must be
true and correct in all respects), and the covenants and agreements
contained in this Agreement to be complied with by the Purchaser at
or before the Closing shall have been complied with in all material
respects, and the Seller shall have received a certificate from the
Purchaser to such effect signed by a duly authorized officer
thereof;
(b) No Proceeding or Litigation. No Action shall have
been commenced by or before any Governmental Authority against
either the Seller or the Purchaser seeking to restrain or
materially and adversely alter the transactions contemplated by
this Agreement which, in the reasonable, good faith determination
of the Seller, is likely to render it impossible or unlawful to
consummate such transactions; provided, however, that the
provisions of this Section 6.1(b) shall not apply if the Seller has
directly or indirectly solicited or encouraged any such Action;
(c) Resolutions of the Purchaser. The Seller shall
have received a true and complete copy, certified by the Secretary
or an Assistant Secretary of the Purchaser, of the resolutions duly
and validly adopted by the Board of Directors of the Purchaser
evidencing its authorization, if required by law, of the execution
and delivery of this Agreement and the consummation of the
transactions contemplated hereby;
(d) Incumbency Certificate of the Purchaser. The
Seller shall have received a certificate of the Secretary or an
Assistant Secretary of the Purchaser certifying the names and
signatures of the officers of the Purchaser authorized to sign this
Agreement and the other documents to be delivered hereunder;
21
(e) Legal Opinion. The Seller shall have received from
XxXxxx Law Firm, P.A., counsel to the Purchaser, a legal opinion,
addressed to the Seller and dated the Closing Date, the form and
substance of which shall be substantially as set forth in Exhibit
6.1(e) attached hereto, as to: (i) the due authorization, execution
and delivery by the Purchaser of this Agreement and the Escrow
Agreement; and (ii) the enforceability against the Purchaser of
this Agreement and the Escrow Agreement (assuming New York law is
identical in all respects to South Carolina law);
(f) Consents and Approvals. The Seller shall have
received (or received evidence of), each in form and substance
reasonably satisfactory to the Seller, all Approvals and all third
party consents necessary or desirable for the consummation of the
transactions contemplated by this Agreement which the Purchaser has
the obligation to obtain; and
(g) Closing of Related Transactions. Closing of the
transactions contemplated by the Series C Stock Purchase Agreement
shall have occurred or shall occur simultaneously with the Closing.
SECTION 6.2 Conditions to Obligations of the Purchaser.
The obligations of the Purchaser to execute this Agreement and
perform its obligations hereunder shall be subject to the
satisfaction (or waiver by the Purchaser, at its sole discretion),
at or prior to the Closing, of each of the following conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Seller contained in this
Agreement (including those set forth in Annex III hereto) shall
have been true and correct in all material respects when made and
shall be true and correct in all material respects as of the
Closing with the same force and effect as if made as of the
Closing, other than such representations and warranties as are made
as of another date, which shall be true and correct as of such date
(provided, however, that if any portion of any representation or
warranty is already qualified by materiality, for purposes of
determining whether this Section 6.2(a) has been satisfied with
respect to such portion of such representation or warranty, such
portion of such representation or warranty as so qualified must be
true and correct in all respects), and the covenants and agreements
contained in this Agreement to be complied with by the Seller at or
before the Closing shall have been complied with in all material
respects, and the Purchaser shall have received a certificate of
the Seller to such effect signed by a duly authorized officer
thereof.
(b) No Proceeding or Litigation. No Action shall have
been commenced by or before any Governmental Authority against
either the Seller or the Purchaser, seeking to restrain or
materially and adversely alter the transactions contemplated by
this Agreement which, in the reasonable, good faith determination
of the Purchaser, is likely to render it impossible or unlawful to
consummate such transactions or which could have a Material Adverse
22
Effect; provided, however, that the provisions of this Section
6.2(b) shall not apply if the Purchaser has directly or indirectly
solicited or encouraged any such Action;
(c) Resolutions of the Seller. The Purchaser shall
have received a true and complete copy, certified by the Secretary
or an Assistant Secretary of the Seller, of the resolutions duly
and validly adopted by the Board of Directors of the Seller and, to
the extent that such authorization is necessary, the shareholders
of the Seller evidencing their authorization of the execution and
delivery of this Agreement, the issuance and terms of the Shares
including, without limitation, the convertibility thereof into
shares of Common Stock, and the consummation of the transactions
contemplated hereby;
(d) Incumbency Certificate of the Seller. The
Purchaser shall have received a certificate of the Secretary or an
Assistant Secretary of the Seller certifying the names and
signatures of the officers of the Seller authorized to sign this
Agreement and the other documents to be delivered hereunder;
(e) Legal Opinion. The Purchaser shall have received
from Xxxxxx Xxxxxxx Xxxxx & Scarborough, L.L.P., counsel to the
Seller, a legal opinion, addressed to the Purchaser and dated the
Closing Date, the form and substance of which shall be
substantially as set forth in Exhibit 6.2(e) attached hereto, as
to: (i) the due authorization by all necessary corporate action,
execution and delivery by the Seller of this Agreement and the
Escrow Agreement; (ii) the enforceability against the Seller of
this Agreement and the Escrow Agreement; (iii) the validity of the
Shares and the due authorization of the shares of Common Stock into
which the Shares may be converted; and (iv) the good standing of
the Seller and each Subsidiary under the laws of their respective
State(s) of incorporation or organization, and related matters;
(f) FCC Opinion. The Purchaser shall have received
from Kurtis & Associates, L.P., special counsel to the Seller, a
legal opinion, addressed to the Purchaser and dated the Closing
Date, the form and substance of which shall be substantially as set
forth in Exhibit 6.2(f) attached hereto, as to certain matters
relating to the FCC Licenses.
(g) Consents and Approvals. The Purchaser shall have
received (or received evidence of), each in form and substance
reasonably satisfactory to the Purchaser, all Approvals and all
third party consents necessary or desirable for the consummation of
the transactions contemplated by this Agreement which the Seller
has the obligation to obtain;
(h) Closing of Related Transactions. Closing of the
transactions contemplated by the Series C Stock Purchase Agreement
shall have occurred or shall occur simultaneously with the Closing;
23
(i) Organizational Documents. The Purchaser shall have
received a copy of: (i) the certificate of incorporation, as
amended, of the Seller, and the Certificates of Designations, as
amended, with respect to the Preferred Stock and the Series C
Preferred Stock, certified by the Secretary of State of the State
of Delaware, as of a date not earlier than five Business Days prior
to the Closing Date and accompanied by a certificate of the
Secretary or Assistant Secretary of the Seller, dated as of the
Closing Date, stating that no amendments have been made to such
certificate of incorporation since such date; and (ii) the by-laws
of the Seller, certified by the Secretary or Assistant Secretary of
the Seller;
(j) Good Standing. The Purchaser shall have received
a good standing certificate for the Seller from the Secretary of
State of the State of Delaware, dated as of a date not earlier than
five Business Days prior to the Closing Date and accompanied by a
bring-down certificate of the Secretary or Assistant Secretary of
the Seller dated within twenty-four hours of the Closing Date; and
(k) No Material Adverse Effect. No event or events
shall have occurred which, individually or in the aggregate, have,
or could have, a Material Adverse Effect.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Survival of Representations and Warranties. (a)
The representations and warranties of the Seller to Purchaser
contained in this Agreement (including Annex III hereto) and in the
Exhibits to this Agreement and the Disclosure Schedule
(collectively, the "Acquisition Documents"), shall survive the
Closing until the later of the second anniversary of the Closing
Date or the conversion of the Preferred Stock into Common Stock.
Neither the period of survival nor the liability of the Seller with
respect to the Seller's representations and warranties shall be
reduced by any investigation made at any time by or on behalf of
the Purchaser. If written notice of a claim has been given prior
to the expiration of the applicable representations and warranties
by the Purchaser to the Seller, then the relevant representations
and warranties shall survive as to such claim, until such claim has
been finally resolved.
(b) The representations and warranties of the Purchaser
contained in the Acquisition Documents shall survive the Closing
until the later of the second anniversary of the Closing Date or
the conversion of the Preferred Stock into Common Stock. Neither
the period of survival nor the liability of the Purchaser with
respect to the Purchaser's representations and warranties shall be
reduced by any investigation made at any time by or on behalf of
the Seller. If written notice of a claim has been given prior to
the expiration of the applicable representations and warranties by
the Seller to the Purchaser, then the relevant representations and
warranties shall survive as to such claim, until such claim has
been finally resolved.
24
SECTION 7.2 Indemnification. 3.a. The Purchaser, its
successors and assigns, and the stockholders, officers, directors,
employees, Affiliates and agents of the Purchaser and its
successors and assigns shall be indemnified and held harmless by
the Seller for any and all Liabilities, losses, damages, claims,
costs and expenses, interest, awards, judgments and penalties
(including, without limitation, attorneys' and consultants' fees
and expenses) actually suffered or incurred by them (including,
without limitation, any Action brought or otherwise initiated by
any of them) (hereinafter a "Loss"), arising out of or resulting
from:
(A) the breach of any representation or warranty
made by the Seller contained in the Acquisition Documents; or
(B) the breach of any covenant or agreement by the
Seller contained in the Acquisition Documents.
(ii) The Seller, its successors and assigns, and the
stockholders, officers, directors, employees, Affiliates and agents
of the Seller and its successors and assigns shall be indemnified
and held harmless by the Purchaser for any and all Losses actually
suffered or incurred by them, arising out of or resulting from:
(A) the breach of any representation or warranty
made by the Purchaser in the Acquisition Documents; or
(B) the breach of any covenant or agreement by the
Purchaser contained in the Acquisition Documents.
To the extent that the Seller's or the Purchaser's undertakings set
forth in this Section 7.2 may be unenforceable, the Seller or the
Purchaser, as the case may be, shall contribute the maximum amount
that it is permitted to contribute under applicable law to the
payment and satisfaction of all Losses incurred by the Purchaser or
the Seller, as the case may be.
(b) An indemnified party shall give the party from whom
indemnification is sought notice of any matter which an indemnified
party has determined has given or could give rise to a right of
indemnification under this Agreement, within 60 days of such
determination, stating the amount of the Loss, if known, and method
of computation thereof, and containing a reference to the
provisions of this Agreement in respect of which such right of
indemnification is claimed or arises; provided, however, that the
failure to provide such notice shall not release the indemnifying
party from any of its obligations under this Article VII except to
the extent the indemnifying party is materially prejudiced by such
failure and shall not relieve the indemnifying party from any other
obligation or Liability that it may have to any indemnified party
otherwise than under this Article VII. The obligations and
Liabilities of an indemnifying party under this Article VII with
respect to Losses arising from claims of any third party which are
subject to the indemnification provided for in this Article VII
("Third Party Claims") shall be governed by and contingent upon the
25
following additional terms and conditions: If an indemnified party
shall receive notice of any Third Party Claim, the indemnified
party shall give the indemnifying party notice of such Third Party
Claim within 30 days of the receipt by the indemnified party of
such notice; provided, however, that the failure to provide such
notice shall not release the indemnifying party from any of its
obligations under this Article VII except to the extent the
indemnifying party is materially prejudiced by such failure and
shall not relieve the indemnifying party from any other obligation
or Liability that it may have to any indemnified party otherwise
than under this Article VII. If the indemnifying party
acknowledges in writing its obligation to indemnify the indemnified
party hereunder against any Losses that may result from such Third
Party Claim, then the indemnifying party shall be entitled to
assume and control the defense of such Third Party Claim at its
expense and through counsel of its choice if it gives notice of its
intention to do so to the indemnified party within five days of the
receipt of such notice from the indemnified party; provided,
however, that if there exists or is reasonably likely to exist a
conflict of interest that would make it inappropriate in the
judgment of the indemnified party, in its sole and absolute
discretion, for the same counsel to represent both the indemnified
party and the indemnifying party, then the indemnified party shall
be entitled to retain its own counsel, in each jurisdiction for
which the indemnified party determines counsel is required, at the
expense of the indemnifying party. In the event the indemnifying
party exercises the right to undertake any such defense against any
such Third Party Claim as provided above, the indemnified party
shall cooperate with the indemnifying party in such defense and
make available to the indemnifying party, at the indemnifying
party's expense, all witnesses, pertinent records, materials and
information in the indemnified party's possession or under the
indemnified party's control relating thereto as is reasonably
required by the indemnifying party. Similarly, in the event the
indemnified party is, directly or indirectly, conducting the
defense against any such Third Party Claim, the indemnifying party
shall cooperate with the indemnified party in such defense and make
available to the indemnified party, at the indemnifying party's
expense, all such witnesses, pertinent records, materials and
information in the indemnifying party's possession or under the
indemnifying party's control relating thereto as is reasonably
required by the indemnified party. No such Third Party Claim may
be settled by the indemnifying party or the indemnified party
without the prior written consent of the other.
SECTION A. Limits on Indemnification. Notwithstanding
anything to the contrary contained in this Agreement, the maximum
amount of indemnifiable Losses which may be recovered from an
indemnifying party arising out of or resulting from the causes
enumerated in Section 7.2 shall be an amount equal to the Purchase
Price. The provisions of this Article VII shall survive the
Closing and any termination of this Agreement.
26
ARTICLE VIII
TERMINATION AND WAIVER
SECTION 8.1 Termination. This Agreement may be terminated
as follows:
(a) by the Purchaser if, between the date hereof and
the time scheduled for the Closing: (i) an event or condition
occurs that has resulted in a Material Adverse Effect; (ii) any
representation or warranty of the Seller contained in this
Agreement shall not have been true and correct in all material
respects when made or as of the Closing Date; (iii) the Seller
shall not have complied in all material respects with any covenant
or agreement to be complied with by it and contained in this
Agreement; or (iv) the Seller or any Subsidiary makes a general
assignment for the benefit of creditors, or any proceeding shall be
instituted by or against the Seller or any Subsidiary seeking to
adjudicate any of them a bankrupt or insolvent, or seeking
liquidation, winding up or reorganization, arrangement, adjustment,
protection, relief or composition of its debts under any Law
relating to bankruptcy, insolvency or reorganization; or
(b) by the Seller if, between the date hereof and the
time scheduled for the Closing: a. any representation or warranty
of the Purchaser contained in this Agreement shall not have been
true and correct in all material respects when made or as of the
Closing Date; b. the Purchaser shall not have complied in all
material respects with any covenant or agreement to be complied
with by it and contained in this Agreement; or c. the Purchaser
makes a general assignment for the benefit of creditors, or any
proceeding shall be instituted by or against the Purchaser seeking
to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up or reorganization, arrangement, adjustment, protection,
relief or composition of its debts under any Law relating to
bankruptcy, insolvency or reorganization; or
(c) by the Purchaser if the closing of the offering of
debt contemplated by the Debt Offering Memorandum and the receipt
by Seller of a minimum of $100 million in gross proceeds therefrom
shall not have occurred on or prior to June 30, 1997; provided,
however, that the Purchaser must notify the Seller in writing
within five Business Days of notice from the Seller of the failure
of such closing contemplated by the Debt Offering Memorandum to
occur of Purchaser's election to proceed (in which case, Purchaser
agrees to waive any conditions to Closing and breaking escrow which
are not then met due to the failure of such closing under the Debt
Offering Memorandum) or to terminate this Agreement or else this
Agreement automatically shall be deemed to be terminated; or
(d) by either the Purchaser or the Seller in the event
that any Governmental Authority shall have issued an order, decree
or ruling or taken any other action restraining, enjoining or
otherwise prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall have
become final and nonappealable; or
27
(e) by the mutual written consent of the Seller and
the Purchaser.
SECTION 8.2 Effect of Termination.
(a) In the event of termination of this Agreement as
provided in Section 8.1, this Agreement shall forthwith become void
and there shall be no liability on the part of either party hereto
except that nothing herein shall relieve either party from
liability for any breach of this Agreement occurring prior to
termination.
(b) In the event of termination of this Agreement as
provided in Section 8.1, the Escrow Agent shall, pursuant to the
provisions of the Escrow Agreement, return the Purchase Price to
the Purchaser and shall return the certificate(s) evidencing the
Shares to the Seller.
SECTION 8.3 Waiver. Either party to this Agreement may: (i)
extend the time for the performance of any of the obligations or
other acts of the other party; (ii) waive any inaccuracies in the
representations and warranties of the other party contained herein
or in any document delivered by the other party pursuant hereto; or
(iii) waive compliance with any of the agreements or conditions of
the other party contained herein. Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed
by the party to be bound thereby. Any waiver of any term or
condition shall not be construed as a waiver of any subsequent
breach or a subsequent waiver of the same term or condition, or a
waiver of any other term or condition, of this Agreement. The
failure of any party to assert any of its rights hereunder shall
not constitute a waiver of any of such rights.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Expenses. Except as otherwise specified in
this Agreement, all costs and expenses, including, without
limitation, fees and disbursements of counsel, financial advisors
and accountants, incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing shall
have occurred; provided however, that the Seller shall reimburse
the Purchaser for the fees and disbursements of Purchaser's counsel
actually incurred in connection with this Agreement and the
transactions contemplated hereby up to an aggregate of $30,000
(including but not limited to such fees and disbursements of
Purchaser's counsel incurred in connection with the Stock Purchase
Agreement dated as of March 14, 1997 between the Seller and the
Purchaser, which agreement was terminated by the parties pursuant
to the Termination Agreement dated as of April 30, 1997).
28
SECTION 9.2 Notices. All notices, requests, claims,
demands and other communications hereunder shall be in writing and
shall be given or made (and shall be deemed to have been duly given
or made upon receipt) by delivery in person, by courier service, by
telecopy or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall
be specified in a notice given in accordance with this Section
9.2):
(a) if to the Seller:
InterCel, Inc.
0000 X.X. Xxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxx, Xx.
with a copy (which shall not constitute notice) to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx X. Xxxxx, Esq.
(b) if to the Purchaser:
SCANA Communications, Inc.
c/o SCANA Corporation
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxxx
with a copy to:
SCANA Communications, Inc.
c/o SCANA Corporation
0000 Xxxx Xxxxxx
Xxxxxxxx, Xxxxx Xxxxxxxx 00000
Telecopy: (000) 000-0000
Attention: X. Xxxxxx Xxxxxx XX, Esq.
29
SECTION 9.3 Public Announcements. No party to this Agreement
shall make, or cause to be made, any press release or public
announcement or otherwise communicate with any news media in
respect of this Agreement or the transactions contemplated hereby
without the prior written consent of the other party (which shall
not be unreasonably withheld or delayed), and the parties shall
cooperate as to the timing and contents of any such press release
or public announcement; provided, however, that with respect to any
disclosure required by law or by a listing agreement with the
National Association of Securities Dealers, Inc. Automated
Quotation System National Market System or any national securities
exchange to which the Purchaser or the Seller is a party, the party
required to make such disclosure shall use its best efforts to
consult with the other party as to the timing and contents of such
disclosure and to obtain such consent prior to the time such
disclosure is required to be made.
SECTION 9.4 Headings. The descriptive headings contained in
this Agreement are for convenience of reference only and shall not
affect in any way the or interpretation of this Agreement.
SECTION 9.5 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced
by any Law or public policy, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect so
long as the economic and legal substance of the transactions
contemplated hereby are not affected in any manner materially
adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as
closely as possible in a mutually acceptable manner in order that
the transactions contemplated hereby are consummated as originally
contemplated to the greatest extent possible.
SECTION 9.6 Entire Agreement. This Agreement and the Escrow
Agreement constitute the entire agreement of the parties hereto
with respect to the subject matter hereof and thereof and supersede
all prior agreements and undertakings, both written and oral,
between the Seller and the Purchaser with respect to the subject
matter hereof and thereof.
SECTION 9.7 Assignment. This Agreement may not be assigned
by operation of Law or otherwise without the express written
consent of the Seller and the Purchaser (which consent may be
granted or withheld in the sole discretion of the Seller or the
Purchaser); provided, however, that the Purchaser may, without the
consent of the Seller, assign this Agreement prior to the Closing
to SCANA Corporation or to a subsidiary controlled by SCANA
Corporation, but no such assignment shall relieve the Purchaser of
any of its obligations under this Agreement.
30
SECTION 9.8 No Third Party Beneficiaries. Except for the
provisions of Article VII relating to indemnified parties, this
Agreement shall be binding upon and inure solely to the benefit of
the parties hereto and their successors and permitted assigns and
nothing herein, express or implied, is intended to or shall confer
upon any other Person any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this
Agreement.
SECTION 9.9 Amendment. This Agreement may not be amended or
modified except: (i) by an instrument in writing signed by, or on
behalf of, the Seller and the Purchaser; or (ii) by a waiver in
accordance with Section 8.3.
SECTION 9.10 Governing Law. This Agreement shall be governed
by the laws of the State of New York.
SECTION 9.11 Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed
to be an original but all of which taken together shall constitute
one and the same agreement.
SECTION 9.12 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any provision of
this Agreement was not performed in accordance with the term hereof
and that the parties shall be entitled to specific performance of
the terms hereof, in addition to any other remedy at law or in
equity.
[SIGNATURES BEGIN ON NEXT PAGE]
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IN WITNESS WHEREOF, the Seller and the Purchaser have caused
this Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
INTERCEL, INC.
BY: ________________________________
Name:
Title:
SCANA COMMUNICATIONS, INC.
BY: ________________________________
Name:
Title:
32
ANNEX I
CERTIFICATE OF DESIGNATIONS
(See Attached)
33
ANNEX II
Registration Rights
(a) The Purchaser shall have the right at any time after the
Closing to make three requests, one of which may be a Shelf Request
(as defined in paragraph (b) hereof) of the Seller in writing for
registration under the Securities Act of shares of Common Stock
into which Shares have been converted or are to be converted prior
to the closing of the offering pursuant to such registration (the
"Securities"): with respect to the first of any such request to
register under the Securities Act at least $10 million in market
value of Securities Beneficially Owned by the Purchaser (the shares
subject to any such request hereunder being referred to as the
"Subject Stock"), and with each subsequent such request being at
least 6 months following the completion of the prior offering
pursuant to a registration statement with respect to the Subject
Stock which was effective until the earlier of the completion of
such offering or three months. The Seller shall use all reasonable
efforts to cause the Subject Stock to be registered under the
Securities Act as soon as reasonably practicable after receipt of
a request so as to permit promptly the sale thereof, and in
connection therewith, the Seller shall prepare and file, on such
appropriate form as the Seller in its discretion shall determine,
a registration statement under the Securities Act to effect such
registration. The Seller shall use all reasonable efforts to list
all Subject Stock covered by such registration statement on any
national securities exchange on which the Common Stock is then
listed or to list such Subject Stock on the National Association of
Securities Dealers, Inc. Automated Quotation System or National
Market System. The Purchaser hereby undertakes to provide all such
information and materials and take all such action as may be
required in order to permit the Seller to comply with all
applicable requirements of the Commission and to obtain any desired
acceleration of the effective date of such registration statement.
Any registration statement filed at the Purchaser's request
hereunder will not count as a requested registration unless
effectiveness is maintained until the earlier of completion of the
offering or three months (other than in the case of a Shelf
Registration, in which case effectiveness must be maintained for an
aggregate of six months or until completion of the offering,
whichever occurs first). Notwithstanding the foregoing, the Seller
(i) shall not be obligated to cause any special audit to be
undertaken in connection with any such registration (provided that
this provision shall not relieve the Seller of its obligation to
obtain any required consents with respect to financial statements
in prior periods) and (ii) shall be entitled to postpone for a
reasonable period (not to exceed 90 days) of time the filing of any
registration statement otherwise required to be prepared and filed
by the Seller if the Seller is, at such time, either (A)
conducting, or proposing to file with the Commission within 90 days
a registration statement with respect to, an underwritten public
offering for the account of the Seller of equity securities (or
securities convertible into equity securities) or is subject to a
contractual obligation not to engage in a public offering and is
advised in writing by its managing underwriter or underwriters
(with a copy to the Purchaser) that such offering would in its or
their opinion be adversely affected by the registration so
requested or (B) subject to an existing contractual obligation to
its underwriters not to engage in a public offering.
Notwithstanding any other provision of this Annex II, the Seller
may postpone action under this Annex II for as long as it
reasonably deems necessary (but no longer than 90 days) if the
Seller determines, in its reasonable discretion, that effecting the
registration at such time might (i) adversely affect a pending or
contemplated financing, acquisition, disposition of assets or
stock, merger or other significant transaction, or (ii) require the
Seller to make public disclosure of information the public
disclosure of which at such time the Seller in good faith believes
could have a significant adverse effect upon the Seller.
No securities, other than Purchaser's, may be registered on a
registration statement requested by the Purchaser pursuant to the
first paragraph of paragraph (a) of this Annex II without the
Purchaser's express written consent, unless the amount of such
securities is subject to reduction prior to any reduction in the
number of securities originally requested by the Purchaser in the
event the lead underwriter of the related offering believes that
the success of such offering would be materially and adversely
affected by inclusion of all the securities requested to be
included therein.
At any time after the Closing, if the Seller proposes to file
a registration statement under the Securities Act with respect to
an offering of its equity securities (i) for its own account (other
than a registration statement on Form S-4 or S-8 or any substitute
form that may be adopted by the Commission) or (ii) for the account
of any holders of its securities (including pursuant to a demand
registration), then the Seller shall give written notice of such
proposed filing to the Purchaser as soon as practicable (but in any
event not less than 10 Business Days before the anticipated filing
date), and such notice shall offer the Purchaser the opportunity to
register such number of shares of Securities as the Purchaser
requests. If the Purchaser wishes to register securities of the
same class or series as the Seller or such holder, such
registration shall be on the same terms and conditions as the
registration of the Seller's or such holders' securities (a
"Piggyback Registration"). Notwithstanding anything contained
herein, if the lead underwriter of an offering involving a
Piggyback Registration delivers a written opinion to the Seller
that the success of such offering would be materially and adversely
affected by inclusion of all the securities requested to be
included, then the number of securities to be registered by the
Purchaser shall be reduced prior to any reduction in the number of
securities originally requested to be registered pursuant to
clauses (i) and (ii) of the first sentence of this paragraph;
provided, however, that the Seller must provide prompt written
notice of such written opinion to the Purchaser. The Purchaser
shall have the right at any time to convert its request for a
Piggyback Registration into a requested registration pursuant to
the first paragraph of paragraph (a) of this Annex II.
34
(b) Upon the request of the Purchaser (the "Shelf Request"),
the Seller shall:
(i) as promptly as reasonably practicable, prepare and
file pursuant to SEC Rule 415 on Form S-3 or such other form as
Seller in its discretion shall determine with the SEC, and
thereafter shall use all reasonable efforts to cause to be declared
effective as promptly as reasonably practicable, a Shelf
Registration Statement relating to the offer and sale of the Shares
by the Purchaser from time to time in accordance with the methods
of distribution elected by the Purchaser and set forth in the Shelf
Registration Statement;
(ii) use all reasonable efforts to keep the Shelf
Registration Statement effective in order to permit the prospectus
forming part thereof to be useable by the Purchaser for an
aggregate period of six months, or for such shorter period that
will terminate when all Shares covered by the Shelf Registration
Statement have been sold pursuant to the Shelf Registration
Statement or cease to be outstanding; and
(iii) notwithstanding any other provisions hereof, use
all reasonable efforts to ensure that (A) any Shelf Registration
Statement and any amendments thereto and any prospectus forming
part thereof and any supplement thereof complies in all material
respects with the Securities Act and the rules and regulation
thereunder, (B) any Shelf Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue
statement of material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading and (C) any prospectus forming part of any Shelf
Registration Statement, and any supplement to such prospectus (as
amended or supplemented from time to time), does not include an
untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements, in light of the
circumstances under which they were made, not misleading.
(c) In connection with any offering of shares of Subject
Stock registered pursuant to this Annex II, the Seller (i) shall
furnish to the Purchaser such number of copies of any prospectus
(including any preliminary prospectus) as it may reasonably request
in order to effect the offering and sale of the Subject Stock to be
offered and sold, but only while the Seller shall be required under
the provisions hereof to cause the registration statement to remain
current and (ii) take such action as shall be necessary to qualify
the shares covered by such registration statement under such "blue
sky" or other state securities laws for offer and sale as the
Purchaser shall reasonably request; provided, however, that the
Seller shall not be obligated to qualify as a foreign corporation
to do business under the laws of any jurisdiction in which it shall
not then be qualified or to file any general consent to service of
process in any jurisdiction in which such a consent has not been
previously filed. If applicable, the Seller shall enter into an
35
underwriting agreement with a managing underwriter or underwriters
selected by the Purchaser (reasonably satisfactory to the Seller)
containing representations, warranties, indemnities and agreements
then customarily included by an issuer in underwriting agreements
with respect to secondary distributions; provided, however, that
such underwriter or underwriters shall agree to use their best
efforts to ensure that the offering results in a distribution of
the Subject Stock sold in accordance with the terms of this
Agreement. In connection with any offering of Subject Stock
registered pursuant to this Annex II, the Seller shall (x) furnish
to the underwriter, at the Seller's expense, unlegended
certificates representing ownership of the Subject Stock being sold
in such denominations as reasonably requested and (y) instruct any
transfer agent and registrar of the Subject Stock to release any
stop transfer orders with respect to such Subject Stock. If
Purchaser enters into an underwriting agreement with respect to the
Subject Stock, Purchaser's representations, warranties and
indemnities contained therein shall be made severally rather than
jointly with the Company or any other selling stockholder and shall
be limited to (i) Purchaser's ownership of the Subject Stock, (ii)
Purchaser's authority to enter into the underwriting agreement and
related matters, (iii) any information provided by Purchaser for
inclusion in the registration statement, and (iv) such other
matters as are at the time of such underwriting customarily
included in underwriting agreements with the Managing Underwriter
relating to sales of common stock by a selling shareholder where
the failure by the Purchaser to make such representations,
warranties or indemnities causes the Managing Underwriter to refuse
to conduct or complete the offering. In the event an offering of
Subject Stock fails to close due to the Purchaser's unwillingness,
inability or other failure to comply with clause (iv) of the
immediately preceding sentence, then Purchaser agrees that the
Seller shall be deemed to have satisfied all of its obligations to
conduct the related offering of such Subject Stock, shall be
excused from any failure of any obligation of Seller with respect
thereto and shall not be liable for the failure of such offering of
such Subject Stock to close. Upon any registration becoming
effective pursuant to this Annex II (other than a Shelf
Registration Statement), the Seller shall use all reasonable
efforts to keep such registration statement current for such period
as shall be required for the disposition of all of said Subject
Stock; provided, however, that such period need not exceed three
months.
(d) The Purchaser shall pay all underwriting discounts and
commissions related to shares of Subject Stock being sold by the
Purchaser and the fees and disbursements of counsel and other
advisors to the Purchaser. All other fees and expenses in
connection with the first requested registration pursuant to the
first paragraph of paragraph (a) (which may be the Shelf Request,
if any) of this Annex II, including, without limitation, all
registration and filing fees, all fees and expenses of complying
with securities or "blue sky" laws, fees and disbursements of the
Seller's counsel and accountants (including the expenses of "cold
36
comfort" letters required by or incident to such performance and
compliance) and any fees and disbursements of underwriters
customarily paid by issuers in secondary offerings, shall be paid
by the Seller, and all such other fees and expenses in connection
with the second and third requested registration pursuant to this
Annex II shall be borne equally by the Purchaser and the Seller;
provided, however, that in the event the Purchaser fails to convert
Shares into Common Stock prior to any such offering, such that such
offering is not able to be completed, the Purchaser shall pay all
such other fees and expenses.
(e) In the case of any offering registered pursuant to this
Annex II. the Seller agrees to indemnify and hold the Purchaser,
each underwriter of Securities under such registration and each
person who controls any of the foregoing within the meaning of
Section 15 of the Securities Act and the directors and officers of
the Purchaser, harmless against any and all losses, claims,
damages, liabilities or action to which they or any of them may
become subject under the Securities Act or any other statute or
common law or otherwise, and to reimburse them for any legal or
other expenses reasonably incurred by them in connection with
investigating any claims and defending any actions, insofar as any
such losses, claims, damages, liabilities or actions shall arise
out of or shall be based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the registration
statement relating to the sale of such Subject Stock, or the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading or (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary
prospectus (as amended or supplemented if the Seller shall have
filed with the Commission any amendment thereof or supplement
thereto), if used prior to the effective date of such registration
statement, or contained in the prospectus (as amended or
supplemented if the Seller shall have filed with the Commission any
amendment thereof or supplement thereto), or the omission or
alleged omission to state therein a material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading; provided, however, that
the indemnification agreement contained in this paragraph (e) shall
not apply to such losses, claims, damages, liabilities or actions
which shall arise from the sale of Subject Stock by the Purchaser
if such losses, claims, damages, liabilities or actions shall arise
out of or shall be based upon any such untrue statement or alleged
untrue statement, or any such omission or alleged omission, (x)
made in reliance upon and in conformity with information furnished
in writing to the Seller by the Purchaser or any such underwriter
specifically for use in connection with the preparation of the
registration statement or any preliminary prospectus or prospectus
contained in the registration statement or any such amendment
thereof or supplement thereto or (y) made in any preliminary
prospectus, and the prospectus contained in the registration
statement in the form filed by the Seller with the Commission
37
pursuant to Rule 424(b) under the Securities Act shall have
corrected such statement or omission and a copy of such prospectus
shall not have been sent or given to such person at or prior to the
confirmation of such sale to him.
(f) In the case of each offering registered pursuant to this
Annex II, the Purchaser and each underwriter participating therein
shall agree, in the same manner and to the same extent as set forth
in paragraph (e) of this Annex II, severally to indemnify and hold
harmless the Seller and each person, if any, who controls the
Seller within the meaning of Section 15 of the Securities Act, and
the directors and officers of the Seller, and in the case of each
such underwriter, the Purchaser, each person, if any, who controls
the Purchaser within the meaning of the Securities Act and the
directors, officers and partners of the Purchaser, with respect to
any statement in or omission from such registration statement or
any preliminary prospectus (as amended or as supplemented, if
amended or supplemented as aforesaid) or prospectus contained in
such registration statement (as amended or as supplemented, if
amended or supplemented as aforesaid), if such statement or
omission shall have been made in reliance upon and in conformity
with information furnished in writing to the Seller by the
Purchaser or such underwriter specifically for use in connection
with the preparation of such registration statement or any
preliminary prospectus or prospectus contained in such registration
statement or any such amendment thereof or supplement thereto.
(g) Each party indemnified under paragraph (e) or (f) of
this Annex II shall, promptly after receipt of notice of the
commencement of any action against such indemnified party in
respect of which indemnity may be sought hereunder, notify the
indemnifying party in writing of the commencement thereof. The
omission of any indemnified party to so notify an indemnifying
party of any such action shall not relieve the indemnifying party
from any liability in respect of such action which it may have to
such indemnified party on account of the indemnity agreement
contained in paragraph (e) or (f) of this Annex II, unless the
indemnifying party was prejudiced by such omission, and in no event
shall relieve the indemnifying party from any other liability which
it may have to such indemnified party. In case any such action
shall be brought against any indemnified party and it shall notify
an indemnifying party of the commencement thereof, the indemnifying
party shall be entitled to participate therein and, to the extent
that it may desire, jointly with any other indemnifying party
similarly notified, to assume the defense thereof, and after notice
from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party
shall not be liable to such indemnified party under paragraph (e)
or (f) of this Annex II for any legal or other expenses
subsequently incurred by such indemnified party in connection with
the defense thereof, other than reasonable costs of investigation;
provided, however, that if there exists or is reasonably likely to
exist a conflict of interest that would make it inappropriate in
the judgment of the indemnified party, in its sole and absolute
38
discretion, for the same counsel to represent both the indemnified
party and the indemnifying party, then the indemnified party shall
be entitled to retain its own counsel, in each jurisdiction for
which the indemnified party determines counsel is required, at the
expense of the indemnifying party. No such third party claim may
be settled by the indemnifying party or the indemnified party
without the prior written consent of the other, which consent shall
not be unreasonably withheld.
(h) If the indemnification provided for under paragraph (e)
or (f) shall for any reason be held by a court to be unavailable to
an indemnified party under paragraph (e) or (f) hereof in respect
of any loss, claim, damage or liability, or any action in respect
thereof, then, in lieu of the amount paid or payable under
paragraph (e) or (f) hereof, the indemnified party and the
indemnifying party under paragraph (e) or (f) hereof shall
contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in
connection with investigating the same), (i) in such proportion as
is appropriate to reflect the relative fault of the Seller and the
prospective seller of Securities covered by the registration
statement which resulted in such loss, claim, damage or liability,
or action in respect thereof, with respect to the statements or
omissions which resulted in such loss, claim, damage or liability,
or action in respect thereof, as well as any other relevant
equitable considerations or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such
proportion as shall be appropriate to reflect the relative benefits
received by the Seller and such prospective seller from the
offering of the securities covered by such registration statement.
No Person guilty of fraudulent misrepresentation (within the
meaning of Section 11 (f) of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such
fraudulent misrepresentation. In addition, no Person shall be
obligated to contribute hereunder any amounts in payment for any
settlement of any action or claim effected without such Person's
consent, which consent shall not be unreasonably withheld.
(i) Notwithstanding anything to the contrary contained in
this Agreement, the maximum amount of indemnifiable losses which
may be recovered from an indemnifying party arising out of or
resulting from the causes enumerated in paragraph (e) or (f) shall
be an amount equal to the Purchase Price.
(j) Capitalized terms not defined in this Annex shall have
the meanings set forth in the Agreement.
(k) Any successor to the Seller (whether by merger,
consolidation, sale of assets, assignment or otherwise) shall
expressly assume in writing the Seller's obligations hereunder.
39
ANNEX III
ADDITIONAL REPRESENTATIONS AND WARRANTIES
(See Attached)
40
ANNEX IV
AMENDMENT TO CERTIFICATE OF DESIGNATIONS
(See Attached)
41
